1920-06-15

MEMORIAL TO THE LATE COLONEL BAKER, M.P.

[Stage Direction]
Hon Sir SAM HUGHES moved that the recommendations contained in the report of the Special Committee appointed to confer and act with a like committee of the Senate to determine the form of a memorial to be erected in the Parliament Buildings to the memory of the late Lieutenant-Colonel Baker, M.P., be commended to the consideration of the Government.
Motion agreed to.

[Stage Direction]
Bill No. 169, for the relief of George Emerson Fox.-Mr. Ross.
Bill No. 179, respecting the Colonial Investment and Loan Company'.-Mr. Mowat.
Bill No. 180, respecting Dominion Trust Company-Mr. McQuarrie.
Bill No. 181, to incorporate The Great West Bank of Canada.-Mr. Cowan.

[Stage Direction]
alleged statement by rev. dr.

Mr. SPEAKER:: The House will recall
that at the last sitting a newspaper report was brought to its attention by the right hon. the Prime Minister, in consequence of which I despatched the following telegram yesterday afternoon:	.
June. 14th, 1920.
Rev. Dr. Speer,
Toronto, Ont.
You are reported in a despatch from Toronto which appears in the Ottawa Citizen, newspaper of this date as follows.
* ' Rev. Dr. Speer stated that letters were of no avail in this case, hut money in the lobby. We hadn't the money. I hope the department did something. It was a foregone conclusion that these men of the race track would get what they wanted.'
Kindly inform me whether you made such a statement or one similar in character. If report incorrect I deem it my duty to request you to inform me what you did say concerning this subject. Matter brought to my formal attention in the House to-day by the Prime Minister supported by the leader of the Opposition. An immediate reply is therefore essential.
Edgar N. Rhodes.
Speaker of the House of Commons.


Mr. BUREAU:: Adding insult to injury.


Edgar Nelson Rhodes: The race track men of course had the money. My thought was not that money was used in the sense of bribery, but in keeping men there. We were berated by one speaker because we did not send letters. The words "foregone conclusion " referred to the fact that after the war was over this matter of racing would come back. I did not leave the impression on the Conference that I thought it a foregone conclusion that the Government would stand in with the race track people. I greatly regret that a false impression was left by the half dozen sentences which X uttered on this question. I shall be glad Sir, if you will make the substance of this telegram clear to the members of the House.
J. C. Speer.
I have only this to say, that I think it is in the highest degree unfortunate that such loose language should be indulged: in by persons holding responsible positions, and that the press should be so careless in the matter of making reports as to enable language, capable of the interpretation which could be placed upon the despatch of yesterday, to go broadcast throughout the country.


Jacques Bureau: Does the House accept
this as an apology from Dr. Speer, and is the matter closed? I think his explanation makes it worse.


Edgar Nelson Rhodes: It is entirely a question for the House.


Jacques Bureau: I think the best policy would have been to have ignored the whole matter. This man now states "I said what I am reported to have said but I do not mean it." He must take us for a lot of children. I cannot regard his aetion as otherwise than extremely foolish.


Rt. Hon. Sir ROBERT BORDEN (Prime Minister):: I should say, in view of the explanation made by Dr. Speer, that the incident may be regarded as closed.



MEN RELEASED ON HABEAS CORPUS RE-ARRESTED.


[Stage Direction]
On the Orders of the Day:
Hon. RODOLPHE LEMIEUX (Maison-neuve):: Mr. Speaker, the other day I brought to the attention of the Minister of Justice the fact that two brothers named Labrie, who have been sentenced to twenty-five years in the penitentiary had been released on Habeas Corpus proceedings and then re-arrested. I noticed in last night's Montreal paper that Mr. Justice Duelos, who presided over the Habeas Corpus proceedings, has ordered the imprisonment of the Warden of the St. Vincent de Paul. Penitentiary for failure to produce the Labrie brothers in court.


Jacques Bureau: For contempt of court.
Mr, LEMIEUX:-and he makes certain comments on the action taken by the officers of the Crown. So that I may not be ruled out of order, Mr. Speaker, I should explain that this is a case of Habeas Corpus proceedings, where the liberty of the subject is involved. The remarks of Mr. Justice Duelos are as follows:
I am informed, that in disobeying the order of ithe court, the warden of the penitentiary ds acting under orders of some authority, and I will say without hesitation that it is high time that these authorities be shown that instead of hindering the process of justice they should do their utmost to facilitate it. I do not know who issued this order to disobey the order of the Superior Court, but whether it is the Minister of Justice of Canada or the Attorney General of this province, I say that they are giving a terrible example and one which can only do great harm to the respect and reputation tribunals are entitled to.
I know what the right hon. Minister of Justice will say in regard to the proceedings themselves-he has given his opinion based on the report of the Deputy Minister of Justice-but what is most serious in my judgment is that not only are the poor. Labrie brothers arrested, but that the warden of St. Vincent de Paul penitentiary has been sentenced to one year's imprisonment.
I would like to know what my right, hon. friend has to say in the matter. Before long he may be arrested himself for all I know, and I would be very sorry if that should happen.


Rt. Hon. C. J. DOHERTY (Minister of Justice):: I appreciate the sympathy in anticipation which my hon. friend extends to me. However, the subject is serious.


Jacques Bureau: Absolutely.


Charles Joseph Doherty: It is very regrettable
that in connection with this incident there should be in any quarter an endeavour to make it appear that there is any conflict between the judicial authority and the executive authority, whether of the province of Quebec or of the Dominion. There is no conflict whatever between either the Department of Justice or the Department of the Attorney General of'the province of Quebec and any court in that province. There is a conflict between two courts, one a court of undoubted criminal jurisdiction which has ordered the warden of the Kingston penitentiary


Mr. EDWARDS:: Kingston?


Charles Joseph Doherty: Pardon me, I refer to
the warden of the St. Vincent de Paul penitentiary


William Cameron Edwards: Poor old Kingston!


Charles Joseph Doherty: A court of undoubted
criminal jurisdiction has ordered the warden of the St. Vincent de Paul penitentiary to take and hold for twenty-five years one of the Labries and the other, I think for life. Then there is an order from a judge of the Superior Court-I am not sure whether 6f a judge in chambers or of a judge sitting in court, but it is immaterial.


Jacques Bureau: It is an order of the
court.	'	.


Charles Joseph Doherty: All right. It is absolutely immaterial. It is an order of the Superior Court; take it that wav. The other order is of the Court of King's Bench. The order of the Superior Court purports to issue under a statute which provides that its provisions shall not have application when men are held detained under conviction of a properly constituted criminal tribunal.
Now, before it is suggested that there is anything in the nature of contempt in the action of the warden or of any one who advised him, might I call attention to his position? He is between the two courts with their diametrically contradictory orders. How much more wicked is it for him to disobey the order of the Superior Court than it would be for him to disobey the order of the Court of King's Bench? He is advised that the court which has jurisdiction in the matter is the criminal court that sentenced these men, and he is advised that the court which purported to make this order of habeas corpus is without jurisdiction.


Mr. TRAHAN:: Who advised him?


Charles Joseph Doherty: I personally take my
full share of responsibility for that advice. But as the hon. gentleman is curious about it


Some hon. MEMBERS:: No, no.


Charles Joseph Doherty: -I might quote what may be described as the advice of the Supreme Court of Canada on precisely the same subject. I am not going to argue the case, but I want to read this extract because it shows exactly what the position is. This is the opinion of Chief Justice Ritchie of the Supreme Court of Canada in rendering the judgment of that court in the case of re Sproule, which will be found in 12 Supreme Court Reports. After citing a number of authorities, be said:
The general rule is well established that a person imprisoned under the sentence of a court having general jurisdiction of the case is not to be discharged by habeas corpus, but should be left to his remedy by appeal, exceptions, or writ of error.
These authorities are, to my mind, conclusive that If the prisoner has any just cause of complaint against the proceedings in this case his remedy, if any exists, cannot be obtained through the instrumentality of a writ of habeas corpus, for I have no hesitation in saying that a judgment of conviction and sentence of the court of oyer and terminer and general gaol delivery of British Columbia-
I presume the hon. gentleman would not suggest that the judgment of a like court in the province of Quebec is not entitled to the same respect.
-on an indictment for murder, confirmed on error by the Supreme Court of British Columbia-
The case had been appealed and was confirmed, but the principle is' exactly tihe same.
-and standing unreversed by the Privy Council is conclusive as to the prisoner being a convicted felon.
That was a case of murder; this is a case of manslaughter.
Such a decision as this on which we are called to pass-
The decision with which we are concerned is precisely the same in principle as the decision there referred to, but the latter was rendered by a judge of the Supreme Court of Canada.
Such a decision as this on which we are called to pass raises a conflict of authority-
That is the source of any conflict of authority in this case.
-between the established Superior Courts of the country and individual judges of a most



extraordinary character; places the officer in whose custody the prisoner ie,-
And this is what I was endeavouring to point out.
-in this most anomalous and trying position, compelling him to elect to hold the prisoner under the judgment and sentence of a court of unquestionably competent criminal jurisdiction, confirmed by the unanimous decision of the full bench of the Supreme Court of the province having unrestricted jurisdiction in criminal eases, or to discharge him under the order of a single judge at chambers, it may be even of a single judge of the very court that unanimously affirmed his judgment and sentence, or a single judge of this court in direct opposition to, and defiance of, 6uch a conviction and sentence.	,
Now, the warden attended with the writ actually endorsed in the identical terms which the Supreme Court in the case I have been citing determined to he a proper and sufficient return. Unfortunately the summons being for half past ten. counsel got into the wrong room in the court house, and before the error was discovered the court had proceeded, with no return before it, to order the release of the prisoner. Fortunately, however, there was not an absolute order, as I am informed, for the imprisonment of the warden. That order, as I am told, 'was issued in the form of a rule nisi so that the warden wild have opportunity next Monday to show cause why he- should not be subject to the imprisonment referred to. I have thought it proper, and have been glad of the opportunity to make this statement because certainly St would be most regrettable if there should be any feeling on the part of any of the authorities concerned that there is any desire to do other than ensure a proper respect for the courts. We owe respect to, and I have the most profound respect for, the Superior Court of my provihce. I am prepared to go further and to say that, speaking of the individual judge, I have the most profound respect for him and entertain a very high opinion both of his abilities and of his character. But my respect extends to all the courts; it goes out just as wholly to the Court of King's Bench, the court charged with the administration of criminal justice, as it does to the Superior Court. Now, if all who- are interested will just possess their souls in patience, I undertake to say that pursuant to our very sincere desire-that is the desire, too, of the provincial authorities-we shall endeavour to find a method by which this question can be judicially and finally decided by the courts. In the meantime we cannot but feel-and1 it is a feeling common to the provincial authorities and to
[Mr. Doherty. J	1 j
ourselves-that it is our duty not to allow a judgment of the Court of King's Bench to be set aside in the way in which it has been and remain unexecuted without, at all events, having exhausted the means which the law affords for having the matter finally and properly determined.


Sir SAM HUGHES:: What was the nature of the crime for whicji these men were sentenced?


Charles Joseph Doherty: The particular circumstances of the case have not come before us in any way in connection with this particular proceeding, but the men are held1 in the penitentiary on conviction of manslaughter.


Mr. CASGRAIN:: Will the same course be followed against another man by the name of Mantezono, who is in a similar position in the county of Charlevoix, was released on writ of habeas corpus by the same judge, and is still free?


Charles Joseph Doherty: If that case is brought to my attention and to>
the attention of the provincial authorities, proper consideration will no doubt be given-


Mr. GAUTHIER:: They will have him arrested.


Charles Joseph Doherty: -to the circumstances of that case.


Jacques Bureau: Just one remark, Mr. Speaker. Does the minister not think that in the interests of justice it would be better to let the courts decide these matters; that if no remedy at (present exists it would be better to pass legislation to afford the remedy rather than have the Minister of Justice substitute himself for the higher courts of the country? That is what I object to.


Edgar Nelson Rhodes: Order. The hon. member (Mr. Bureau) is really submitting his opinion in the form of a question, which is not in order. I think that the Minister of Justice has submitted a very full and complete answer to the question put, and I respectfully suggest that any further reference to this matter may more properly ibe made at another stage of the proceedings.


Charles Joseph Doherty: May I be allowed to protest against the suggestion that I have done anything such as the hon. member (Mr. Bureau) has suggested.'


Rodolphe Lemieux: Your Honour will admit that this is a very serious question, involving the liberty of a subject, and one would think that it is of such urgent importance as to merit its discussion now.


Edgar Nelson Rhodes: The matter is undoubtedly of importance and for that reason no interposition was made in connection with the very full reply given by the Minister of Justice. But it would hardly be desirable, on the calling of the Orders of the Day, when no subject is definitely before the House, to have what is in effect a debate on this question.



CANADA WHEAT BOARD.

[Stage Direction]
On the Orders of the Day:
Mr. A. B. MeOOIG (Kent): I have received a number of telegrams from farmers' clubs protesting against the re-appointment of the Canada Wheat Board. Have the Government considered this matter, and if so what action do they intend to take?
Robert Laird Borden: I can only say that any necessary announcement will be made in due course.



LA CHINE CANAL WORKS.

[Stage Direction]
On the Orders of the Day.
Mr. J. A. LEDUC (Westmount-St. Henry):: Mr. Speaker, before the Orders of the Day are called, I wish to inquire of the Minister of Public Works whether it is the intention of his department to continue the works already started in the L&chine canal in connection with a syphon to conduct the w'ater from the little riviere St. Pierre. Does the minister intend to proceed with that work this summer?


Edgar Nelson Rhodes: Order. This question ought to be submitted either upon the Order Paper or when the Estimates of the Department in question are under consideration. The matter may be one of importance, perhaps of urgency to the people immediately affected, but it is not a matter of wide public import.



SPECIAL WAR REVENUE ACT, 1915, AMENDMENT.


[Stage Direction]
On motion of Sir Henry Drayton (Minister of Finance) the House went into Committee of Ways and Means (from June 11) to consider the proposed resolution precedent to the amendment of the Special War Revenue Act, 1915, Mr. Boivin in the Chair.
The CHAIRMAN:: When the House wae last in committee on this resolution it had been discussed during two sittings. A motion had been made and carried to the effect that the resolutions be now considered paragraph by paragraph and item by item.
226*
Resolved, That it is expedient to amend The Special War Revenue Act, 1915, and to provide :-
1. That the following excise taxes be imposed, levied and collected on the total purchase price of the articles hereinafter specified, and on articles of clothing the said tax may be imposed upon the combined selling price of materials and cost of manufacture when sold separately :-
Mr. MeKENZIE: I understand, Sir, that you are now reading the resolutions as amended.


Georges Henri Boivin: No, the original resolutions. No amendments have yet been moved.


Sir HENRY DRAYTON:: In pursuance of the understanding, notice of which has already been given, it becomes necessary now to move amendments to the resolutions as brought down. Before doing so, I desire to point out first that if hon. members will look at the list, they will find that paragraph (a) of the first resolution mentions boots, men's clothing, men's overcoats, cloth overcoats, waistcoats, women's dresses, women's suits. All articles of clothing, either boots or clothes, are contained in the list. Then, if hon. gentlemen will look at paragraph (b), they will find an item of carpets, the provision there being that carpets in excess of S3 per yard are subject to the tax provided in the paragraph. The suggestions embodied in Hansard provide for the removal of those articles from the provisions which impose a direct tax on the whole of the amount, when the amount is in excess of the sum stated, into a clause where they will be taxed only on the amount in excess of 'the amount stated. Therefore, I move:
That the following words be struck out of paragraphs (a) and (b) of section 1:
And on articles of clothing the said tax may be imposed upon the combined selling price of materials and cost of manufacture when sold separately:-;
Boots, shoes, pumps and slippers of any material (not including shoes or appliances made to order for persons having a crippled or deformed foot or ankle) in excess of $9 per pair;
Clothing consisting of coat, vest and pants or coat and pants, men's and boy's, in excess of $45;
Cloth overcoats, men's and iboy's, women's and misses', in excess of $50 each ;
Waistcoats, men's, sold separately from suits, in excess of $5 each ;
Dresses, women's and misses', in excess of $45 each ;
Suits, women's and misses', in excess of $60 each ;
Carpets in excess of $3 per yard ;
Knitted sweaters and knitted sweater coats in excess of $15 ; and the following paragraphs (d) be inserted after paragraph (c) :

(d) That the following excise taxes be imposed, levied and collected on so much of the amount paid for any of the following articles as is in excess of the price hereinafter specified as to each such article:
Hon. gentlemen will see that we are taxing now merely the excess in so far as these particular items are concerned, carrying out the proposition made when the matter was last under consideration:
A tax of 10 per cent on:
Carpets and rugs in excess of $6 per linear yard of 27 inches in width;
A tax of 15 per cent on,-
Boots, shoes, pumps and slippers of any material (not including shoes or appliances made to order for persons having a crippled or deformed foot or ankle, or to top boots not less than twelve inches in height such as are used in lumbering, mining and fishing industries, or to river driving boots fitted with caulks on soles thereof) in excess of $9 per pair;
Clothing consisting of coat, vest and pants, or coat and pants, men's and boy's, in excess of $45.


Jacques Bureau: That is the same thing.


Henry Lumley Drayton: Yes, it is merely transferring it from the straight 10 per cent tax on the whole, to 15 per cent on the excess, a much lower tax.
Trousers, sold separately from suits in excess of $12 per pair;
Coats, men's and boy's, sold separtely from suits, (not including leather coats lined with sheepskin) in excess of $25 each;
Cloth overcoats, men's, boy's, women's and misses', in excess of $50 each ;
Waistcoats, men's, sold separately from suits, in excess of $45 each;
Dresses, women's and misses', except silk, in excess of $45 each;
Skirts, separate from dresses, except silk, in excess of $15 each;
Suits, women's and misses', except silk, in excess of $60 each :
Coats, women's and misses', sold separately from suits, except silk, in excess of $35 each;
On articles of clothing, the selling price of materials and cost of manufacture when sold separately are to be combined when determining the selling price.	[DOT]
Mr. MeMASTER:	Has the minister any
printed copies of what he is reading?


Henry Lumley Drayton: The hon. member will find it all at page 3446 of Hansard with one exception, to which I want to draw hon. members attention. The item, "knitted -sweaters and knitted sweater coats," is something that is covered by the new resolution, and action so far as that is concerned will have to wait until the new resolutions are considered. That is the only matter which the hon. member will find is not mentioned specifically in Hansard.


Mr. EULER:: Has the minister not included hats amongst these articles on which the tax shall be collected only upon the excess price?
iSir HENRY DRAYTON: No.


William Daum Euler: I would suggest that hats
should be included, because a hat is as much a necessary article of clothing as any other article of clothing could be. I do not see why a distinction is made.


Henry Lumley Drayton: The range of
varieties is very great in hats, and one can be -so economical or so frightfully extravagant in hats-[DOT]


William Daum Euler: So you can be in clothing.


Henry Lumley Drayton: -that it was
felt that the tax on an extravagant hat should be on the whole price. While it is quite true you can be extravagant in clothing, at the same time the amount is much greater and, therefore, the penalty for extravagance is really greater than in the case of hats. This is digressing for a minute, but it may save time later on. We have 'been going very carefully into the cost of hat manufacture. We find that while the price of raw furs nas dropped very largely, decreases in price ranging to GO per cent in raw -skins, the prepared -fur which is necessary for the manufacture of felt hats, instead of going down, has increased in price very much for the reason that the product is largely obtained from Belgium and France and the supply on hand is very limited. I speak subject to correction, but I think I am approximately correct when I say that the quantity which before could be bought for something like $2.50, to-day costs something like $10.50. When we come to that -particular item I am going to pro-'nse to raise the price up to which hats will be exempt from $5 to $7.


Jacques Bureau: The price will be raised?


Henry Lumley Drayton: Yes.


Mr. LOGO  IE@: I should like to know why the minister is making an exception of silk dresses, silk skirts, and silk goods generally for ladies. If you limit the price I cannot conceive why it is necessary to except a garment made of silk as against a garment made of fine wool, which will cost very nearly the same. You will often get a garment the weft of the material of which is cotton or wool and the warp silk.


Jacques Bureau: Silk is a frill; wool is a necessity.


Mr. LOGGIE:: I do not agree. I think
a silk garment costing the same as a wool garment is just as much a necessity lor a lady. When you are limiting the price, I cannot conceive why it is necessary to except silk garments as against woollen.


Mr. DUFF:: What about silk stockings?
Mr. ARCHiAMiBAULT:	And silk petticoats?


William Stewart Loggie: Silk stockings will come
up under another clause and I shall hav a word to say about them then. I think the point I have raised is worthy of the minister's consideration.


Mr. PROULX:: I endorse what my hon. friend (Mr. Loggie) has said. To except silk garments is discriminating against the merchants who manufacture and sell silk. I think the limit should be the same in both cases. I do not see why a woman should not be just as much at liberty to buy a silk garment as a woollen one.
Mr. iPEDLOW: I fear this section has not been thoroughly considered. ' It is undoubtedly inconsistent that silk material by the yard should be taxed but that manufactured silk garments should be free, whereas woollen materials when purchased by the yard are free and the manufactured woollen garment is taxed. I should like the minister to explain that.


Henry Lumley Drayton: I quite agree
with the hon. member (Mr. Pedlow) that we have to be consistent, and that is just why the tax is as it is. We are taxing raw silks when purchased by the yard. The idea of that tax is that silk is to some extent a luxury. It is a very nice thing and we all like to see it worn in the becoming way it is worn by the ladies, but still it is a luxury, and we think that people who can afford to buy silk might well be asked to pay a tax on it. You can buy silk cheaper than you can buy some essentials. The test of extravagance is not altogether the price that is paid for an article. In a climate like ours silk of itself cannot be looked upon as a necessity. In hot weather cottons are cheaper, and in our cold weather silk is hardly the thing. In answer to the specific point raised by my hon. friend I desire to point out that we have a tax of 10 per cent on raw silk. Then all articles of clothing are subject to a tax above a certain price. The silk manufactured garment is subject to a tax. The effect of this provision is not to exempt silk dresses but to have a tax on all silk dresses without the
limitation; while woollen dresses and articles that are of a more useful character are exempt up to a certain price.


Mr. PEDLOW:: Does the minister think that the trade generally would understand that? As it reads now it says " Except silk dresses." Is it the intention of the minister to frame a new paragraph covering silk dresses?


Henry Lumley Drayton: The proposal is that all silk clothing, including artificial goods not specifically mentioned, shall be subject to the tax.


Mr. CALDWELL:: I should like to direct the attention of the minister to that section of the list which deals with top boots. It is proposed to extend the exemptions to top boots not less than 12 inches in height, such as are used in lumbering, mining, river driving, etc. I would point out to the minister that there are very few driving-boots that are as high as 12 inches, and the number of those that are higher than 11 inches is very limited. The majority of these boots are as a matter .of fact only 8 inches in height, and this applies to boots used by lumbermen, fishermen and miners. Very few river drivers, I may also in*-form the minister, buy boots or shoes with the caulks in for the reason that a man cannot put on a pair of new shoes and go into a stream immediately. He has to wear them for two or possibly three weeks before driving in order to have them properly conform to the shape of his feet. I would suggest to the minister that he amend this provision and make it 8 inches, instead of 12 inches.


Henry Lumley Drayton: If river-driving boots are not fitted with caulks they are ordinary lumberman's boots, which are protected. The only boots that are used for occupational purposes are lumbermen's, miners', and fishermen's boots, and I am informed that all these boots are at least 12 inches in height. The clause says "top boots not less than 12 inches in height," but I am prepared to change that to 10 inches if the committee so desire. If we go lower than that; however, we shall run the risk of throwing the whole list open.


Isaac Ellis Pedlow: The divisional list is not an altogether wise one, and in this respect I do not think the minister has been properly advised as to the prices of the various parts of a suit of clothes. I have a list prepared by one of the foremost
3 p.m. manufacturers in the country, and the prices of the different gar-

ments that constitute the suit, make a total of $45, comprised as follows: coat $31.50, trousers $10.50, and vest $7.50. This is the division which this manufacturer has prepared and which I think is a scientific one, and I would suggest to the minister that he adopt these figures. Another point which I would direct to his attention is the fact that the excess price named for an overcoat, man's or woman's, $60, and the price for a suit, $45, are inadvisable. I submit that if there is any difference in the prices of these two items it should be in favour of the suit. It requires a greater number of yards to make a suit of clothes than an overcoat and it costs more to make it, and the difference should be in favour of the suit of clothes rather than the overcoat. This applies to ladies' suits and coats as well. It takes more cloth to make the suit and consequently these [DOT] figures should be reversed.


Henry Lumley Drayton: Dealing with the first point, as I took down the hon. member's figures, I think his total is wrong. The figures he gave total $49.50. He gave $10.50 for trousers, $31.50 for coat and $7.50 for vest, so that his figures come to $4.50 more than they should. Of course, I know that figures like these are sometimes the result of scientific calculation. Now, we have not tried to arrange this matter scientifically, because we are aiming at a specific object, and that is to make it unprofitable for people to try to cheat the country of revenue. It is much better that they should not buy clothing separately; they should get a suit of clothes from one man and not buy the trousers at one store and the coat and vest at other places in order to evade the tax. As a matter of fact', the proportional prices we put in are really less than $45, and the division will make it extremely unlikely that any one will endeavour to escape paying the tax by going around and buying clothes piecemeal.
Mr. CALDWELI,:	May I revert to the
question I raised a moment ago? This paragraph reads:
Besides changing the tax on hoots so that it applies only on the excess, it is also proposed to extend the exemptions to top hoots not less than 12 inches in height.
I do not think that the situation is perfectly clear, and I think that the paragraph should be so constructed as to show beyond any doubt that these top boots for lumbering, mining and fishing industries are totally exempt.


Henry Lumley Drayton: The hon. member will see that there are two questions involved so far as boots are concerned: first, the question of the limit at which exemption shall be fixed, and secondly, the question of the applicability of the tax at all. We do not tax those boots that are used in the occupations to the cost of carrying on which we do not wish to add.
Mr. 'CALDWELL:	I think it would be
just as well to make it perfectly clear that there is total exemption so far as these particular boots are concerned. Ordinary people reading the instructions contained in this paragraph are very apt to misunderstand, and I know for a fact that many items in the resolutions brought down on the 18th of May were not fully understood by many. I find that a good many of our local storekeepers misunderstood some of the items in those resolutions, and they could not be blamed for doing so because the subject was not as lucidly stated as perhaps it might have been. I find a good many of our local storekeepers have misunderstood the instructions, so I think it would be very easy to misunderstand what is meant in this case.


Henry Lumley Drayton: It would seem to be so clear that there is no room a* all for misunderstanding. However, instructions will 'be given and a proper list of taxable articles will be drawn up.


Georges Henri Boivin: Before we proceed further with this resolution I must remind the committee that a motion has been agreed to which provides for its consideration paragraph by paragraph and item by item. I certainly cannot interpret that to mean that hon. members of the committee can pick out special items at random and discuss them. Bourinot in his excellent work on parliamentary procedure states that when a Bill is taken clause by clause or paragraph by paragraph all amendments must be made in consecutive order, without unanimous congest the committee cannot amend the latter part of a Bill or resolution and then proceed to consider an amendment to the first paragraph. I can quite understand the position in which hon. members have been placed, and have no blame to offer nor any fault to find with any hon. member, but if the committee would agree with the Chairman I think we should take the resolution as it now stands with the proposed amendments, read it item by item, discuss each item as it is reached and reserve to hon. members the right to discuss any question concerning the principle of this form of taxation, or

the general application of the tax when we have completed the consideration of the different items. We will make better progress in that way.


Thomas Wakem Caldwell: There is ijust one thing I would like to say. I bow to your ruling, Mr. Chairman, but as a member of the Pensions Committee I have to be at its sitting in five minutes and unless I am able to express my views on this item now I may not have another opportunity.


Georges Henri Boivin: I am quite sure in view of the circumstance mentioned by the hon. member that he will have the unanimous consent of the committee and be allowed to complete his question.


Thomas Wakem Caldwell: I would like to see the minister make the regulation as- to these boots not less than eight inches in height instead of not less than twelve inches. I am sure it iwill result in great hardship if he does not.


Henry Lumley Drayton: I do not think there is the slightest necessity of making any change. I am sure all these men take boots of at least twelve inches in height.


Thomas Wakem Caldwell: I have worn out a good many pairs of driving boots and I never wore boots that were over eleven inches in height in my life, and' I think I am as long in the lower extremities as most river drivers.


Mr. TOBIN:: Instead of eight inches it should be seven inches.	^


Mr. MICHAUD:: There is no need for very high boots when the water is not very cold. I would therefore suggest to the minister that he modify the recomendatiom in the manner suggested.


Henry Lumley Drayton: Surely the hon. gentlemen will see that this discussion is entirely beside the question. The limitation as to height only refers to boots of a character which, apart from the height, cannot be at all recognized. That is boots worn in lumbering, mining, and fishing. Now the reason that the men engaged in these occupations have special boots is to get special protection, and that special protection is only in the length of the leg. In the case of the river drivers' boots it is entirely different. That boot is a low boot and can be easily identified by the caulks on it.


Edmund William Tobin: How are you going to identify such boots by caulks when for long spells, especially in the summer, there are no caulks on the boots.


William Stewart Loggie: As I understand the minister's motive it is that there should be no tax on lumbermen's boots. I am sure he understands that in the winter season the most of the boots that are worn by the men in the woods are larrikins, and I should say they would be less in height than the boots indicated in the resolution. If they were included it would only be in the event of their being over $9. In that case there will be no danger of larrikins being included because they are less than $9 in price, and so the tax would not be applicable to them.


Thomas Wakem Caldwell: There is just one other point that the minister has lost sight of. He says that river driving boots will be recognized by having caulks. But river drivers don't wear boots with caulks in them continually. These boots must be worn for a couple of weeks before the men go into the water with them otherwise they would be too hard on the feet. Moreover they do not wear boots with caulks on them around their own home. I therefore fail to see how the caulks would be an infallible means of identification.


Henry Lumley Drayton: I do not see any other means of identification than the caulks. If you do not adopt that method a person could buy any kind of boots and say they were going to use them for river driving.


Pius Michaud: The caulks are always put on after the boots are bought.


Jacques Bureau: They do not use such boots in the streams.


Thomas Wakem Caldwell: The river driver's boot is one of special make and capable of being used in the water every day. The ordinary boots if used for this purpose would not last three days. The river driver's boot could not possibly be mistaken for any other boot.


Georges Henri Boivin: We shall now take the first item:
Hats, men's and boys, in excess ot ?5 each. Mr. PROULX: Has the resolution regarding silk dresses been disposed of?


Georges Henri Boivin: The item respecting silk dresses will be taken up when we reach it.


Henry Lumley Drayton: I move that the figure "$5" in this item be made "$7."
The CHAIRMAN- As amended the item will read:	i	|	I

Hats, men's and boys, in excess of $7 each.


Jacques Bureau: That is more reasonable.
Amendment agreed to and item as amended agreed to.
Caps, men's and boys' in excess of $2 each.


Henry Lumley Drayton: I move to amend this item by inserting the words "except fur" after the word "caps" so that the item will then read:
Caps, except fur, men's and boys' in excess of $2 each.


Mr. McMASTER:: Before this amendment is carried might I ask the minister if he has considered the suggestion which I made in my observations on the Budget as a whole. .1 drew his attention to that fact that he would acquire a great deal more money if he made these luxury taxes and duties to a certain extent countervailing. He is placing on the article produced at home exactly the same tax as upon the imported article. The latter will pay to the treasury 30, 35, or even 45 per cent. Upon the price, plus this duty, the luxury tax will be imposed, which may prohibit, or certainly very much diminish, importation, and therefore affect the Customs receipts. At the same time the minister is placing, it is true, luxury tax on the home produced article, but that will be only a trifle compared with amount of duty and luxury tax combined borne by the imported article. It would seem to me that he would be well advised in these excise taxes to differentiate between what is imported and what is manufactured at home, and place a substantially higher rate of tax on the home produced article. In this way he would deflect into the treasury a great deal of money which is now going to swell the profits of the home manufacturers.


Henry Lumley Drayton: I am afraid it would never do to introduce a further complication into the subject that is already somewhat complex. I do not know exactly how it would be possible to carry out the hon. gentleman's suggestion. I would point out to him that as things now stand every single reason that to-day exists for these articles being imported will continue with the luxury tax, because they are selling in competition with the home article subject to a certain disability, and the equilibrium is maintained; and, further, as there is a tax on both, the percentage of equilibrium is less in favour of the imported article.


Mr. HENDERS:: Among people who are exposed to the cold a great deal there is a cap in very common use lined on the inside
[The Chairman.]
and with flaps that can be pulled down to give greater protection to the ears and neck. That cap cannot, be bought for $2. It is undoubtedly a necessary article of wear in winter time, and I think there should be some recognition of that fact.


Henry Lumley Drayton: I entirely agree with the hon. member. In using the word " fur " I meant to include a cap either of fur or fur-lined. To make it perfectly clear, I think the exception might be made to read " except fur or fur-lined."


Mr. DOUGLAS (Strathcona):: That hardly covers the point raised by the hon. member for Macdonald (Mr. Henders). The cap he refers to is made of cloth with fur ear laps, and would not be covered by the description " fur-lined."


Henry Lumley Drayton: "or with fur ear laps."


Andrew Ross McMaster: Ear laps would give a wrong impression. 'The extension comes down over the whole back of the head and protects the ears and neck.


Georges Henri Boivin: "Caps, except fur caps or caps lined wholly or partly lined with fur."


Henry Lumley Drayton: That will make it right.


Mr. GOULD:: It is a well known fact, even to some of our hon. members from the East, that in the West very early in the fall we are obliged to don these fur caps if we wish to have any comfort. Fur does constitute a very necessary article of apparel in the West during many months of the year. I would like to see that tax made as easy as possible on the people of Western Canada. Undoubtedly as it is now it will rests more easily on the people of the eastern provinces.


Henry Lumley Drayton: I do not know the hon. gentleman's trouble, because we are excepting from this particular item fur caps and caps made of fur. There is another item later on.
Item as amended agreed to.
Hose or stockings, silk, men's and boys', in excess of $1.00 per pair.	.


Andrew Ross McMaster: The minister should make his minimum higher than one dollar a pair. The plainest sock without clocks or any other adornment cannot be 'bought for less than a dollar a pair. The minister should remember that dry feet are the foundation of good health, and therefore

he should not tax <so'cks in this drastic fashion.


Henry Lumley Drayton: Mr. Chairman, I do not know that silk stockings have very much to do with dry feet, and I do not believe that the presence of clocks or any other adornment has very much to do with it either. I think, though, the item should he slightly amended. I move that the words "or artificial silk" Ibe inserted after the word "silk." While the customs give a reading which would cover that, we might just as well make it perfectly plain here, so the item will read:
Hose or stockings, silk or artificial silk, men's and boys' in excess of $1.00' per pair.


Isaac Ellis Pedlow: "Hose" includes stockings, and I would suggest that the word "socks" is a more appropriate woTd in connection with men's wear. In regard to the remarks made by the hon. member for Brome (Mr. McMaster) I think that silk socks are likely to conduce to cold feet rather than warm.
Item as amended agreed to.
Hose or stockings, silk, women's and misses' in excess of $2.(M) per pair.
Mt. LOGG'IE: Let me say to the committee that there is no economy in 'buying silk stockings as .such at $2.00 per pair.
Mr. DOUGLAS (Stratbcona)': Why buy them at all?


William Stewart Loggie: Well, I think if hon. members \will consider the matter they will agi^ee with me that as the ladies adorn themselves to-day stockings are not a luxury. In my judgment silk stockings cannot be produced .to-day to sell at $2.00 per pair, and if made of artificial silk it is no economy to buy them. It seems to me that when every lady in this city, I venture to say, wears silk stockings, if not every day, at least on Sunday-


An hon. MEMBER:: How do you know?


William Stewart Loggie: Never mind how I know. I do not think the retail trade can sell silk hose to-day that will give reasonable satisfaction at less than $3 to $3.50 per pair. There is no economy in buying silk hose at $2 per pair, because they have not the required lasting qualities.


Henry Lumley Drayton: I desire to add the words "or artificial silk," after the word "silk."


[Stage Direction]
Amendment agreed to.
Mr. LOGGIE':	There will be confusion,
too, for this reason; stockings may be part of cashmere and part of silk. No provision is made for such a case.
Item, as amended, agreed to.
Nightgowns in excess of $3- each.
Isaac Ellis Pedlow: With reference to the
item "Pyjamas and underwear in excess of $5," in my judgment pyjamas are a luxury, a modern innovation, and should be taxed on the basis of a lower price than $5. I suggest that the figure he S3, as in the ease of nightgowns.


[Stage Direction]
Item agreed to.
House or smoking jackets, or hath and lounging robes.
Henry Lumley Drayton: I move that
the word "or" be substituted for the "and" between the words "bath" and "lounging."


[Stage Direction]
Amendment agreed to, and item as amended agreed to.	.
Pyjamas and underwear in excess of $'5.
Henry Lumley Drayton: Underwear combinations are one thing and ordinary undergarments another. As the resolution now stands there is no tax on ordinary underwear garments because they can be purchased for less than $5, whereas there is a heavy tax on underwear combinations. I therefore move that the resolution be amended to read as follows:
Pyjamas in excess of $5 ; underwear consisting of shirt and drawers in excess of $3 per separate garment; underwear combinations in excess of $6 each.


Mr. HAROLD:: I submit that the minimum in respect of union suits is not high enough. I am informed that $8.50 is required Tather than $6 to purchase a proper garment for this climate, made of wool. We ought to consider this matter carefully, because there are some well-known lines of underwear that have been used for many years, the prices of which are more than $6 a suit. Underwear is a necessity, and this minimum should be increased. I submit also that underwear shirts should be allowed a higher figure than $3.


James McCrie Douglas: I have already spoken on this matter, but I desire to support as strongly as I can the remarks of my hon. friend (Mr. Harold). It is absolutely impossible to touiy for $6 a suit of union underwear made of wool. In the province from which I come nobody can wear cotton underwear in the winter with any degree of comfort, and if you compel

every one who wears woollen underwear in winter to pay a tax over and above the regular tax imposed by customs, you will inflict -an unjustifiable hardship on the people.


Andrew Ross McMaster: I wish to say a word in support of what has been said in this connection. To tax woollen underwear at the rate the minister proposes is merely to tax the health of the people, the foundation of all our wealth and all our prosperity. I strongly urge the minister on the broadest public grounds to increase the minimum so that the working man, the farmer, the lumberman, the fisherman, the man who has to go out in all hours and endure the rigours of the Canadian climate, will not be taxed when he goes to- buy that which is -absolutely necessary to protect him from weather conditions.


Henry Lumley Drayton: I do not think that the people to whom my hon. friend (Mr. McMaster) refers are buying garments at prices as high as those here mentioned. You can get pretty decent Canadian-made underwear suits at the figures given. They might not be as nice as the hon. gentleman would like; possibly they would be a little rough and irritating, -but still they could be got. However, in view of the conditions in the West, as well -as in Quebec, where the climate is very cold and where the heavier garment is probably necessary, I move that the figures be changed to $4 and $8 respectively.


Georges Henri Boivin: The item now reads:
Pyjamas in excess of ?5 per pair ;
Underwear consisting of shirts and drawers in excess of $4 per garment ;
Underwear, combinations, in excess of $8 each;
Item, as amended, agreed to.
Purses and pocket-books, in excess of ?2 each ;


Isaac Ellis Pedlow: Before this item is carried, I should like to suggest that the two items "purses and pocket-books in excess of 82 each" and "shopping and hand-bags in excess of 86 each" be combined. It is almost impossible, in ordinary practice in business, to distinguish between these two items, because they overlap each other in so many ways. The United States schedule includes purses, pocket-books, shopping and hand-bags under the same heading, and the price on which the article is taxes is in excess of 87.50 each. I would not suggest such a large price as that. The United States schedule continues:
fMr. Douglas. 1
For the .purpose of the tax .purses shall be deemed to include all receptacles used for carrying money on or about the person. The term "pocket-book" is broader in meaning than "purse", and includes any receptacle other than a purse for carrying money, papers, cards, memoranda, etc., in the pocket or on or about the person. The term "shopping and hand bags" shall include all bags, whether or -not fitted with toilet articles, designed to be carried in the hand or on the arm for the purpose of conveying commodities or personal effects.
I would suggest that a lower price be named for shopping-bags in combination with purses and pocket-books. In that way, there would be less difficulty as regards the tax. I would suggest a minimum of 85.
Sir HENRY DRAYTON; I was going to suggest, in view of the hon. member's suggestion, he might like to split the difference and make it 84 on them all, but there is one other thought in connection with that, and that is that after all shopping and hand-bags are not absolute luxuries, they are really necessaries, and I doubt if one could get for 84 a shopping-bag or hand-bag that would be any good.


Mr. BEST:: Leave the item as it is.


Henry Lumley Drayton: I should think it would be better to leave the item as it is. After all there is a distinction between a purse and a hand-bag; one is put into your pocket and the other is carried.


[Stage Direction]
Item agreed to.
Umbrellas, parasols and- sunshades in excess of ? 4- each.
Andrew Ross McMaster: The minister should make that a little higher.


Some hon. MEMBERS:: No.


Andrew Ross McMaster: I think the minister will find, if he goes to buy a first-class umbrella-and after all, if a friend does not walk off with a first-class umbrella or if you do not lose it yourself, a first-class umbrella is good economy to buy-it will be very difficult to obtain one for 84.


[Stage Direction]
Item agreed to.
Gloves, except fur in excess of $3- per pair.
'Mr. LOGGIE: This is an article of lady's dress that, it seems to me, is in common use from day to day, and gloves of a reasonable length on the arm cannot be purchased retail at the present time at $3 per pair.
Mr. VEiRVILLE: Shorten them.
Mr. LOGGI'E: If this is a luxury tax, good and well, but I claim that gloves are not a luxury. Almost every lady you pass on the street is wearing a pair of gloves

that will cost more than $3 retail.
Item agreed to.
Coats and robes, the component material of chief value being fur, in excess of $100' each;
Henry Lumley Drayton: That is covered by the proposal made the other day. I move:
That the words "coats and robes, the component material of chief value being fur, in excess of $100- each", in paragraph (a), and the words "wearing apparel, not otherwise provided for in this resolution, the component material of chief value being fur," in paragraph (b), be stricken out, and the following words be inserted in paragraph (a) :
Coats, the component material of chief value being fur, including repairs thereto, in excess of $200 each ;
Gloves, the component material of chief value being furT in excess of $1'5 per pair;
Caps, the component material of chief value being fur, in excess of $15 per pair;
Muffs and neckpieces, the component material of chief value being fur, in excess of $35 each;
Robes and rugs, the component material of chief value being fur, in excess of $50 each;
Wearing apparel, not elsewhere specified, the component material of chief value being fur.


John Harold: I should like to submit that these rates are too low. They provide for fur wearing apparel for children and girls up to about fifteen years of age, but they do not permit of the use of our best known furs required for women's wear, furs such as sable, mink, dyed coon and beaver. I would submit for the consideration of the minister that these furs are necessary in our winter climate, especially for those women who have to travel a long distance, and they should be able to obtain them without the necessity of paying a tax. The tax should be arranged to apply on furs only in excess of $50 per piece, that is, for a muff or neckpiece, or even $75 per piece, or $150 for the set. $35 per piece is altogether too low. I think if the minister is not willing to accept this suggestion at the moment, the item should stand until lie has considered it further.
Item as amended agreed to.
Cut glassware:
Sir HENRY DRAYTON; There is another expensive kind of ware which sells in competition with cut glassware and which is very often thought to be cut glassware and that is, etched glassware. It is equally expensive, and it seems to me it is only fair that it should be treated in the same way. I therefore beg to move to add after the word "glassware" the words "and etched glassware."
*Mr. McMiASTER: Are there not a number of other kinds of high priced glassware
besides cut glassware and etched glassware? I think there are. I am afraid the minister with regard to this item is just picking out a couple of kinds and letting the others go free. It is not quite fair to the people who specialize in these lines.


Henry Lumley Drayton: If the hon.
member will mention any additional kinds that should be taxed I shall be very glad to do it.


Andrew Ross McMaster: I am a very economical person and rarely buy these goods, but I have seen, for instance, beautifully coloured Venetian glassware. You can buy it in Venice when you go there, if you have enough money. I know there are other kinds of glassware. I cannot specify them at the present moment, but I believe if the minister went into an establishment such as Henry Birks and Sons, Montreal, he would see not only this Venetian glassware but other beautiful and very expensive glassware which are neither cut glassware nor etched glassware.
Item las amended agreed to.
Sporting goods, such as tennis rackets, nets, racket covers and presses, skates, snowshoes, skis, toboggans, canoe paddles and cushions, polo mallets, baseball bats, gloves, masks, protectors, shoes and uniforms, football helmets, harness and goals, basket-ball goals and uniforms, golf bags and clubs, lacrosse sticks, balls of all kinds, fishing rods and reels, billiard and pool tables, chess and checker boards and pieces, dice, games and parts of games (except playing cards' and children's toys' and games, all similar articles commonly or commercially known as sporting goods in exoess of 50' cents ;


Henry Lumley Drayton: I beg to move
that this item be struck out and that the following be substituted therefor:
Sporting goods, such as tennis rackets, nets, racket covers and presses, snowshoes, skis, canoe paddles and cushions, polo mallets, baseball protectors, football helmets, harness and goals, basketball goals and uniforms, golf bags and clubs, baseball, laorosse, hockey and football uniforms, balls of all kinds not hereinafter specified (not including balls for children) fishing rods, reels, lines, spoons and artificial bait, billiard and pool tables, chess andi checker boards and pieces, dice, games, and parts of games (except playing cards and children's toys, games and express wagons) and all similar articles not elsewhere specified commonly or commercially known as sporting goods in excess of 50 cents ;
Baseball bats and baseballs in excess of $1.25 ;
Baseball masks and gloves in excess of $1.50 ;
Skates in excess of $2.00 per pair;
Toboggans and hand sleds in excess of $3.00 each ;
Footballs in excess of $3.00 each;
Lacrosse sticks in excess of $1.'5'0 each;
Hockey sticks in excess of 75 cents each.
[Mr. McMaster.J


Mr. FIELDING:: It seems to me there
are a lot of items here which cannot he obtained for any such price as 50 cents.
Sir 'HENRY DRAYTON: Some of these goods, of course, are very expensive, but others such as fish hooks, cheap fishing lines and children's fishing material, would not cost 50 cents. We do not want to put a tax on those small articles at all, nearly all of which can be got for less than 50 cents.


William Stevens Fielding: Billiard tables, for instance, not exceeding 50 cents are exempt. Is there such a thing as a 50 cent billiard table?


Henry Lumley Drayton: Not that I have been able to learn.	.
Mr. FI El.DING :	What about fishing
rods and reels? If my hon. friend can get these for 50 cents the anglers would be glad to know it.
-Sir HENRY DRAYTON: I used to buy a straight bamboo pole for 15 cents, and it did very well. The hon. member will see that all small articles are covered. There is a general clause dealing with what are commercially known as sporting goods and [DOT] we do not want to tax anything under 50 cents.


Andrew Ross McMaster: 
Isaac Ellis Pedlow: The amended paragraph omits two items which are included in the original resolution, namely, skates and toboggans. I should like to know the reason for the omission of these two items. I observe also that canoe cushions are to be taxed. How are we to distinguish between a cushion that is used in a canoe, and a verandah cushion? It is impossible to do so.


Henry Lumley Drayton: The point, is well taken. I do not believe there is much use in the word "cushion" in this connection, but if a canoe is bought with cushions I fhink those cushions should be taxed, and for that reason the word is necessary. We are not thinking of separate cushions in connection with this item, but when a person buys a canoe with paddles and any other appurtenances, cushions,
4 p.m. if they are included, should be taxed. Possibly it may make no great difference, but there can be no harm in leaving the word in. With regard to the other question raised by my hon. friend, the words he mentions are omitted because we have a limit as to the cost of skates in the resolution. Skates must be in excess of $2 per pair before being taxable, and that leaves children's skates free.


Isaac Ellis Pedlow: What about toboggans?


Henry Lumley Drayton: The same thing applies to toboggans; children's toboggans and handsleds are free.


Mr. PARENT:: >Is there any reason why skis should not be exempt? This question may not apply with such force to Ontario . and the West, but it does so far as Quebec is concerned, for in that province skis are very much in use. They are equally as popular as skates and toboggans and should also be exempt.


Henry Lumley Drayton: Would the hon. member suggest "skis in excess of S3," so as to keep this article in the same class?


Georges Parent: Do I understand that $3 is the limit?


Henry Lumley Drayton: No. The hon. member asks that skis be treated the same as toboggans and Kandsleds which are free of taxation up to $3. Does he suggest the same thing in regard to skis?


Georges Parent: Yes.


Henry Lumley Drayton: I have no objection to that.


Georges Henri Boivin: Sir Henry Drayton moves to insert after the words:
Toboggans and handsleds in excess of $3.00 each.
the following words:
Skis in excess of $3.00 per pair.


Mr. MANTON:: I think that the hon, member for Brome went rather too far in his remarks, but that there are a few games which are regarded as of more or less national pastimes among public and high school children. There are three or four items here that could be left out with absolute advantage to the people and no loss to the minister. For example, snow-shoes, baseball bats, gloves, masks and protectors, and in fact everything connected with the baseball game, and lacrosse sticks, etc., should be omitted from this list. Baseball and lacrosse are national games and I do not think they should be penalized.


Henry Lumley Drayton: 1 do not think the hon. member has seen the amendment, He will find it at page 3447 of Hansard. We exempt baseball bats and baseballs up to $1.25.


Mr. McCOIG:: You cannot buy any kind of decent baseball for $1.25.


Henry Lumley Drayton: The dealers inform me that you can.


Archibald Blake McCoig: You cannot buy a good baseball for less than $2.50.


Jacques Bureau: A baseball costing less than that would not be used by a child' of ten.


Mr. BELAND:: You cannot get a baseball with any good trade mark for $1.25


Henry Lumley Drayton: I do not suppose that there is any class of people who are more keenly anxious to get away from taxation than the people who are in the business. I have been besieged by deputations night and day and deluged with telegrams from every part of the country, and on cross-examining these gentlemen
I find that the articles here referred to are sold at as cheap a price as is mentioned.


Edmund William Tobin: At that price they are of no practical use.


Henry Lumley Drayton: I am informed that they are good enough for young people's games. Of course, they would not be suitable for a league game.
Mr. -BUREAU: You have to pay $2.50 and $3.
Mr. MeMASTER: There are a few articles in this list swhich might bear taxation, such as golf bags and clubs and billiard and pool tables. I would suggest that they might possibly be put under the tax of 10 per cent, the same as boats, yachts, canoes, etc. These things are used by people of more mature years who have ample pockets. I urge very strongly the advisability of wiping out the item as it is in respect of juvenile sport which should be encouraged and not taxed. I am somewhat surprised that the minister cannot see the matter in the light in which I, and also a very large number of the members of the House, see it.


Georges Henri Boivin: Shall the item as amended- carry?


William Stewart Loggie: Before the item carries. Regarding snowshoes, I would like to remind the minister that snowshoes are used by lumbermen in a very large way, and I wonder if it is the intention to relieve them from the tax.


Jacques Bureau: Snowshoes are used by the cruisers only.


Henry Lumley Drayton: Snowshoes, as a matter of fact, are used in a business way very much more than they .are used in a sporting way. I have no. objection to the snowshoes being struck out.


Jacques Bureau: Will the minister increase the amount of exemption in the case of lacrosse sticks and baseball bats for the youngsters.
Sir HENRY DiRAYTQN: I wonder what hon. gentlemen will say as to the value of lacrosse sticks at $1.50. I used to get very good ones at seventy-five cents.myself.


Jacques Bureau: I got them for thirty-five cents fifty years ago.


Henry Lumley Drayton: Well, what do hon. members says?


Mr. McKENZTE:: All through the items there seems to be an intention to give one

the option of buying a cheaper article and getting it free o.f tax, or buying a dear article and paying the tax. I wish somebody would suggest how you can get a fishing rod and reel for fifty cents; I never heard of such a thing. No person can buy a decent fishing rod and reel for less than $7 or $8.	,


Henry Lumley Drayton: There is no
doubt we intend every one to pay a tax on a fishing rod and reel. As to baseball bats I would point out that if prices are as bad as hon. gentlemen say they are they are entirely too high and should come down. I think this tax is going to help to bring prices down. 1 have no objection, if the committee desire it, to make the figure, in the case of baseball bats and baseballs $1.50 in place of $1.25.


Edmund William Tobin: You cannot get any for
$1.50, make it $3.	.


Jacques Bureau: A $2 bat will not be used by any grown-up person. Those who will buy the cheaper goods are the boys who cannot afford the more expensive articles. If they were all the sons of rich men I would'say "tax them."


Henry Lumley Drayton: Then we will say:
Baseball bats and base balls in excess $2; Lacrosse sticks in excess of $2 each.


Georges Henri Boivin: Do I understand that the minister also wishes to amend the item by striking out "snowshoes"?


Henry Lumley Drayton: Yes.


Georges Henri Boivin: Shall the item as amended carry?


Andrew Ross McMaster: Lost.
Item as amended agreed to.
Plated ware not otherwise provided for in this resolution adapted for household or office use.


Henry Lumley Drayton: I desire to move an amendment in that connection. Plated ware apparently is something which the customs treat as covering nickel plating, brass plating and the like. That is not a luxury at all and so I move that the item be amended so as to read:
Articles plated with gold or silver not otherwise provided for in this resolution, adapted for household or office use.
That makes nickel and brass plating free.


Jacques Bureau: That would exempt all nickel-plated articles such as percolators.


William Stewart Loggie: Nickel plated table cutlery?
[Mr. McKenzie.!


Henry Lumley Drayton: Yes.
Item as amended agreed to.
Velvets, velveteens, plush and silk fabrics.


Henry Lumley Drayton: I move that the words "silk fabrics" be struck out and the following words be added:
Silk and artificial silk fabrics in excess of $2 per yard.


William Stewart Loggie: Before this item carries
I would like to ask the minister what provision is made either in the resolutions introduced at the time of the Budget Speech, or in the amendments of which notice has been given regarding women's silk skirts or silk coats? I understand silk skirts will be subject to a tax on the full amount of $15 although there seems to be no amendment before the House in that regard at the present time. I also infer that the item "dresses, women's and misses', in excess of $45 each" has been cut out altogether.


Henry Lumley Drayton: No, that"is not cut out. It has been placed under the excess tax.


William Stewart Loggie: I now understand from
the minister that item has not been cut out. Well, as I understand it, what the tax means is this:. A silk skirt is taxable not for the excess in value over $15 but for its full value. Therefore at the 10 per cent rate a skirt which has been bought for $20 will pay $2 tax, and a coat costing $40 will pay $4 tax. If we are going to make clothing pay the excess over a certain price it is surely reasonable that silk garments should come within the same category and only pay the percentage on the excess. Another thing that is inconsistent: As proposed you allow women to go into a store and buy silk-


Andrew Ross McMaster: You cannot stop them.


William Stewart Loggie: -at $1.95 a yard without a tax, but if that silk is made up into a garment it is taxed. It seems to me that is an anomaly. It certainly is not encouraging a woman to make her own dresses.


Jacques Bureau: Why should she?


William Stewart Loggie: Why should she not?


Jacques Bureau: You would put all these , tailors out of business. Have a heart. You are selling the goods, let the tailor live also.


William Stewart Loggie: Well, Mr. Chairman, I
cannot conceive that this is consistent with

the principle of a luxury tax. To me it is not any luxury these days for a woman to buy a silk skirt. If she pays $20.00 for it, she has to pay a $2.00 tax.


Jacques Bureau: It serves her right.


William Stewart Loggie: But if she buys a wool
skirt at the same price, she has to pay only $1.20.


Some hon. MEMBERS:: Carried.


William Stewart Loggie: Mr. Chairman, as a rule I do not take up very much of the time of the House. I want to ask the minister to consider what I have just mentioned. He is introducing the principle of equality in taxing both men's and ladies' clothing on the excess price only; whereas in regard to silk garments he is taxing on the full value. Then I would like to draw his attention again to the anomaly that silk at $2.00 per yard is taxed, but the garment made up from silk is not taxed until a rather high price is reached compared with the $2.00. Three yards and a half will make a lady's skirt, and it does seem to me an anomaly to, differentiate to this extent.


Henry Lumley Drayton: The reason for the difference in the scale is that we regard silk as something which is not an absolute necessity in our climate, while we think that wool and other materials are; so the tax is paid on the whole value. As to silk sold by the yard as against silk made up into a skirt or dress, silk sold by the yard is not taxable unless it costs more than $2.00 a yard; while silk made up into a garment and sold is taxable on the full value.


Mr. LABOR:: 
John Harold: Could the minister give us some of the trade names of silk fabrics? Do dress goods called "georgette" come under the description of silk fabrics?


Henry Lumley Drayton: I think that is silk.


William Stewart Loggie: Georgette is a very thin
material,-quite as thin as silk, if not thinner.


Jacques Bureau: It is too thin. Let it go.


William Stewart Loggie: Some georgette is made
of silk, some not. As I understand, the minister has not separated the value of ladies' silk dresses, as he has done in the case of ladies' wool dresses. Would it not be advisable to make this separation?


Georges Henri Boivin: We have not yet
reached that item.


William Stewart Loggie: Perhaps not.
Embroideries of silk.


Henry Lumley Drayton: I move to amend that item to read:
Embroideries of silk or artificial silk.


Andrew Ross McMaster: How is the minister
going to treat mixtures of wool and silk which we see advertised?


Jacques Bureau: He will call it "silk cocktail".
Item as amended agreed to.
Lace, including collars or collarettes of lace and all manufactures of lace;


Henry Lumley Drayton: I move to amend this item so that it will read as follows:
Lace and braid in excess of fifty cents per yard: Collars and collarettes of lace and all manufactures of lace in excess of $1.00.


William Stewart Loggie: In my judgment that is an impracticable clause. It means putting the onus on a retail merchant when selling a collar to say how many yards of lace it contains.


Henry Lumley Drayton: We have changed that.


Some hon. MEMBERS:: Carried.


William Stewart Loggie: Mr. Chairman, as far as
I am concerned this item will not carry for a moment or two at any rate. I think the amount is entirely too small; it should be "not less than $3.00". Otherwise you are taxing every working girl, and as this is a luxury tax it seems to me that we ought hot to tax what is virtually just as much a necessity as bread. I know as a matter of fact that an imitation lace collar of any appearance at all cannot be sold for less than $3.00, and a collar of the same size but of better quality would have to be sold' for $6.00. Of course, the latter I admit would be a luxury; it might be a hand-made collar. But the ordinary lace collar should not be taxed unless in excess of $3.00. Quite a number of these collars are worn with a bib to them.


Jacques Bureau: Don't tax bibs for goodness sake.


William Stewart Loggie: 
Henry Lumley Drayton: I would like
to meet my hon. friend by making the [DOT]value $2.00 instead of $1.00. The item will now read:
Collars and collarettes of lace and all manufactures of lace in excess of $2.00.


William Stewart Loggie: In connection with the
same class of goods there is what is known as vesting, which is sold by the yard. A lady may buy a quarter of a yard of it and use it instead of buying an expensive piece of lace. Vestings, etc., over eight inches wide should, I suggest, not be taxable except when it costs over $5 a yard, and when between four and five inches wide might be taxed at $2 per yard. This branch of dry goods, as I may call it, is sold by the yard.


Jacques Bureau: Luxury-call it by its
name.


William Stewart Loggie: No, it is not a luxury; it is made of the very cheapest lace.
Item as amended agreed to.
Ribbons of all kinds and materials.


Henry Lumley Drayton: I move that the resolution be amended to read as follows:
Ribbons of all kinds and materials, (except typewriter ribbons) in excess of 50 cents per yard.
Item as amended agreed to.


Henry Lumley Drayton: In connection
with paragraph (a), notices of certain amendments were given. We might profitably discuss these other items now.


Georges Henri Boivin: The committee will
now consider the amendments to this resolution of which notice was duly given on June 10 and which amendments will be found in the Votes and Proceedings of that date.
Clocks and watches in excess of $10 each.


Isaac Ellis Pedlow: I am advised by jewellers that the minimum is too low; that it is impossible to purchase a good, reliable watch at that price and that the limit should be $20.


Henry Lumley Drayton: I think that the jewellers are really not interested in this item. There is a special item in relation to jewellers and watches of a better quality which covers the whole field of taxation so far as that class of trade is concerned.
[Mr. Bureau.)


Andrew Ross McMaster: The jewellers may not object to this item but the consumers of the country may object when a watch which sells at say $15 is regarded as a luxury and a tax is imposed upon it.


William Stevens Fielding: Consumers of time.


Andrew Ross McMaster: Yes, consumers of
time, and those who have to use watches, which includes the vast body of Canadian people. This is not a tax upon a luxury; it is a tax upon a necessity. Certainly the minimum should be increased.


Henry Lumley Drayton: It is not a question of the consumer on the one side and the jeweller on the other. It is proposed to have a general tax on jewellery to cover the whole of the jewellers' output, leaving it to the jewellers themselves to apportion it as they think best. There are, however, a large number of watches of a cheap character that are not sold in jewellers' shops at all. The better watches are always sold by regular watchmakers and jewellers, but hardware shops carry cheap watches, not good ones, and clocks. It is to cover those that this item is proposed.


Mr. ROBB:: What provision is the minister making, as regards not only watches, but other items of this nature, to take care of the travelling pedlar who goes about the country with a kit?


Henry Lumley Drayton: I am afraid we shall have to tax the travelling pedlar who goes about with a kit. He will have to take out a license.


Mr. WILSON (Saskatoon):: My understanding is that, on account of the difficulty of specifying all articles handled by jewellers in order to impose a tax on those articles, it is proposed to license jewellers as jewellers and to subject them to a tax of 10 per cent on their turnover on all articles which they handle.


Henry Lumley Drayton: That is correct.


William Stevens Fielding: We are now dealing,
not with jewellery generally, but only with watches.


[Stage Direction]
Item agreed to.
All furniture finished in gold leaf, vemi martin, or with ornamental or expensive inlays such as mother-of-pearl, or with hand-painted decorations.
William Daum Euler: I notice in Hansard of a
few days ago the hon. member for Beauce (Mr. Beland) asked the minister whether under that item would be included furniture composed of veneered woods, and I think the reply given by the minister was

[DOT]3575
in the affirmative. I do not know whether the woods are specified. Would this include mahogany, walnut and oak veneers?


Henry Lumley Drayton: It includes
only the expensive woods that are mentioned. The whole resolutions ' strike only at extravagant furniture. The first item, for example, "antique furniture" refers to real antique furniture as such, not to reproductions, the sort of expensive furniture that * you get when you are paying a great deal for antiquity, the real old article. It does not refer to any furniture which is made to-day and which is sometimes as cheap as any other kind of furniture you can get, which is an imitation of an antique article. The tax is imposed merely on antiques of those expensive woods which are very valuable.


Mr. CAMPBELL:: Does it refer to period furniture?


Henry Lumley Drayton: Not at all. It refers only to the genuine antique itself.


Georges Parent: If I remember rightly,
when I called the attention of the minister some time ago to what veneereM furniture was, I think he replied that veneered furniture would be taxed. What I have in mind is this. You may have a piece of furniture made, for instance, of spruce or pine with a thin edging of ebony or something of that kind stuck to it in some way. That sometimes becomes a very expensive piece of furniture, and I see in these resolutions no provision for taxing such furniture. Is it the intention of the minister to tax it?


Henry Lumley Drayton: The intention
is to tax it, and we think the resolution covers it.


Georges Parent: It does not say so.


Henry Lumley Drayton: I think it does.


Mr. ARMSTRONG (East Lambton):: Does the resolution cover auction sales of furniture?


Henry Lumley Drayton: None of the
proposals cover auction sales in any way.


Joseph Elijah Armstrong: Some dealers sell by auction.


Henry Lumley Drayton: What I mean by that is this. Supposing, for example, a man is giving up housekeeping and selling his furniture. He would pay no tax at all, 'because that is not his ordinary, regular business. He is simply realizing upon something that is of no further use to him. But if a dealer chooses to sell his goods 227
by auction, he will pay the tax just as much as if he were selling in the ordinary course of business.


William Stevens Fielding: Does the minister provide for that distinctly in the resolution?


Henry Lumley Drayton: I will see that that is provided for now.


William Daum Euler: My reference was not to antique furniture, but more particularly to those classes of furniture called veneers, which, as stated by my hon. friend (Mr. Parent), become quite expensive. It may be perfectly true that those articles of furniture are in a sense luxuries; probably they are. For example, a bedroom suite may run as high as $600, or $1,000, or $1,200. I do not think it is the intention of the minister to inflict any loss upon any manufacturers or any disability upon workmen engaged in those factories. In the city from whjch I come the' art of furniture making has been developed to a very high degree from the cheapest classes of furniture to the most expensive. It does not necessarily follow that manufacturers who are engaged in the business of making more expensive and artistic furniture, if you like, are in a position to stand any great financial loss. I am told that, as a result of the tax which has been imposed upon these more expensive lines of furniture, there has already been an enormous number of cancellations of goods which had been sold by the manufacturers. There is no doubt whatever that those men will have to suffer a very serious loss, because not only will they have those stocks left on their hands, but they have already prepared a considerable quantity of raw material in the way of expensive goods which cannot very well be adapted for any other kind of furniture than this particular kind. The suggestion has been mane to me-and it seems to me a fair one-is that these men, instead of being compelled to suffer this loss, should be given some opportunity of adapting themselves to the manufacture of other lines and should be enabled to sell what furniture they have already in stock and the material which must be made into that kind of furniture. This is a very serious matter to many manufacturers in this country, and perhaps the minister would give it some consideration.


Robert James Manion: When I was at home recently, a complaint was made to me that a man might walk into a furniture store and buy a suite of bedroom furniture of walnut, mahogany or maple or some of those woods, costing perhaps $500, and no tax



would 1>e imposed upon bis purcahse. If that 'be correct, I do not think it is fair, because anybody who can afford to pay out $500, or $600, or $700 for a suite of bedroom furniture can afford to pay a pretty stiff tax. I do not see any reference in this resolution to furniture of mahogany or maple or any of those expensive woods such as my hon. friend has spoken of, and I think they should be taxed.


Henry Lumley Drayton: There is no tax upon maple furniture because that is about the cheapest furniture one can get. Maple is now woTth less than pine. Maple used to be sold for $25 per M, if I remember correctly; it is selling now for about $97 per M. It is a poor finishing wood, and there is very little of it sold.


Francis Ramsey Lalor: What about bird's-eye
maple?


Henry Lumley Drayton: Bird's-eye
maple is of a better class. The difficulty about the whole furniture 'business at the present time is the tremendous expense of woods which are practically altogether imported. Quarter-cut oak that is' used in furniture has risen in value from approximately $100 per M to something like $398 per M, and similar advances have taken place as regards walnut, mahogany and other expensive woods. There is no doubt that costs to the furniture manufacturer have abnormally increased owing to reasons which were not within his power or competency to control. In addition to that, furniture glass is practically all Belgian glass. The - ordinary mirror for a dresser before the war cost $2.58, if I remember correctly, and now costs something like $2.75, so costs have gone up very greatly. We are not here attempting to regulate the cost of furniture by a tax. The cost of ordinary furniture is so great at the present time that there is not much room for a cut, but there is room in the case of these absolute luxuries. We think antique furniture in these expensive woods, walnut, mahogany, rosewood, ebony and oak, is distinctly a luxury. Carved ebony and lacquered funiture are certainly luxuries, and so on through the list.


William Stevens Fielding: Will the minister have any difficulty in determining what is antique furniture?? I believe the experience of some buyers, not only of furniture but paintings and other things, is that that which is bought for antique is very modern sometimes. I suppose if the dealer represents it to be antique, the minister will

collect the tax. There may be a claim afterwards for a refund.


[Stage Direction]
Item agreed to.
All liquor cabinets, smoker cabinets, tea wagons, sewing cabinets, work tables, piano lamps or stands, table lamps or stands, ferneries, jardinieres, pedestals and bric-a-brac, made of rosewood', prima vera, solid mahogany or ebony or lacquered or decorated ;
Rodolphe Lemieux: Will the minister explain what is meant by bric-a-brac?


William Stevens Fielding: There is a well known definition. It is anything you don't need, should not have, and have no room for.


Henry Lumley Drayton: I think we
should accept that at once.


Rodolphe Lemieux: Is it not a good
description of the Government?


[Stage Direction]
Item agreed to.
(b) A tax of twenty iper cent on,-
Cigar and cigarette holders and pipes in excess of $2.50 each ;
Cigar and cigarette cases, ash trays and match boxes of gold or silver;
Humidors and smoking stands ;
Hunting and shooting garments and riding habits ;
Andrew Ross McMaster: That is a very heavy
tax on riding habits.


[Stage Direction]
Item agreed to.
Gold, silver, ebony and ivory toiletware:
Henry Lumley Drayton: I beg to move
that the word "ebony" be struck out, and to add to paragraph (a) the item "ebony and imitation ivory toiletware." The reason for this is that ebony toiletware is a cheap kind of toiletware, and we are therefore transferring it from the 20 per cent to the 10 per cent class, and including a new item, "imitation ivory toiletware." The reason for including imitation ivory toiletware is that under the customs regulations when you tax ivory, substitutes are taxed as well, and, of course, these imitations are very often cheap.


Georges Parent: The minister is adding
the word "imitation" as regards toiletware, but he does not U6e that word in connection with the item "ivory-handled cutlery" in paragraph (a).


Henry Lumley Drayton: I am not adding the word "imitation" to "ivory toiletware" in paragraph (b), but am making a new item in class (a) for "ebony and imitation ivory toiletware." Ivory toiletware is left in paragraph (b), because it is very expensive.


[Stage Direction]
Amendment agreed to.

Oriental rugs:
Henry Lumley Drayton: It is proposed to reduce the tax of 20 per cent on Oriental rugs and to treat them as we are treating antique furniture and china. I therefore move to strike out this item from paragraph (!b) and to insert it at the end of paragraph (aa).


[Stage Direction]
Amendment agreed to.
Gold and silver handled pocket knives and pencils.
Henry Lumley Drayton: I beg to move to insert after the word "knives" the words "fountain pens."


William Daum Euler: Does the minister think
fountain pens are a luxury?


William Stevens Fielding: Gold and silver-handled fountain pens.
Mr. McMAiSTER:	There is a possibility
of misunderstanding here. It might be construed from the item as it is worded that the gold and silver apply to the handle of the pocket knife and not to the fountain pen. I would also suggest some other phraseology which will put it beyond doubt that it is fountain pens with gold and silver adornments which are being taxed, and not the ordinary fountain pen, which is used largely by students as well as other people.	.


Henry Lumley Drayton: It covers the
ordinary pen. If this item were not here the gold-nibbed pen would be taxable, under subsection (c), 50 per cent of its value.
Mr. McMAiSTER:	I must protest most
energetically against this tax. I do not suppose that there is any body of men and women in the country who use fountain pens more continuously than students, and there are no people for whom the Minister of Finance should have greater regard than those young men and women who are preparing themselves for their life's work. I therefore protest, I repeat, most energetically against taxing ordinary fountain pens. Those that are manufactured outside oif the country pay substantial duties coming in, and to regard ordinary fountain pens as a luxury is, with all due respect to the minister, the height of absurdity.


William Stevens Fielding: If the minister wishes to tax pens with gold mountings and decorations I heartily support him, but I do not imagine that he could have intended to tax the ordinary fountain pen which is so widely used to-day. I trust he will reconsider his view on that point if he does 2271
intend to include such pens in the list of taxable luxuries.


Henry Lumley Drayton: Perhaps we
could revise the item to read:
Gold and silver-handled pocket knives and gold and silver-mounted fountain pens and pencils:
Now, subsection (c) provides a heavier tax on:
Articles of gold not otherwise provided for in this resolution adapted for household or office use.
Gold pen nibs are adapted for office use, and I therefore suggest adding at the end of that clause the words "except gold pen nibs" so as to put the questions beyond all doubt. Pens are not subject to that heavier tax.


Georges Henri Boivin: Before we reach that
subsection, we shall dispose of the amendment in subsection (b). Sir Henry Drayton moves that the words "gold and silver-handled pocket knives and pencils" be replaced by the following item:
Gold or silver-handled pocket knives and gold or silver-mounted fountain pens or pencils.


Mr. GLASS:: It seems to me that this
imposes an unnecessary hardship and it also gives rise to some confusion. An ordinary Waterman pen may have a very small gold band around it and may be sold at an ordinary price, say $3.50. Now, no doubt the intention of the minister is to restrict extravagance and to tax those who desire to buy gold-mounted pens largely for their ornamentation. Why not apply the same method here as is adopted, with other items in the schedule, and fix a limit of price? For instance, you might say fountain pens not exceeding $3.50 or say $5, above which price they might be held to be a luxury. Certainly, the ordinary Waterman fountain pen to-day costing $5 is not a luxury. There are some pens that: are gold-mounted and ornamented tha.t run up to $15 and $25, and I would suggest that beyond $5 this article might be classed as a luxury that should bear a tax. Under the schedule as it is now, if a pen merely has a band of gold around it, though it may be an ordinary pen of not any great value, it is taxable. If there were a limit of price there would be no misunderstanding and the tax would depend on the sum that was paid for the pen.


Edmond Proulx: Most (fountain pens have holders attached, either gold or silver, and

I am afraid they would he considered to be ornamental.


William Stevens Fielding: Why not adopt the
suggestion of the hon. member (Mr. Glass) and fix a limit? That would probably meet all that the minister has in mind, while it would exclude the ordinary fountain pen.


Henry Lumley Drayton: I think perhaps it may be best to add at the end of the section a further item dealing specifically with fountain pens "fountain pens in excess of $5." That would leave the former item as it was before:	"gold and silver-handled
pocket knives and pencils."


Georges Henri Boivin: Where is the (proposed item to be inserted?


Henry Lumley Drayton: It might come in after the pocket knives and pencils. That would be the most appropriate place for it.


[Stage Direction]
Item agreed to.
Curtains, including tapestry curtains, in excess of $7..5'0 each.
Sir HENRY' DRAYTON:	I move that
this item be taken from the 20 per cent class and transferred to the 10 per cent class. That makes the tax only 10 per cent.
Resolution agreed to.
Chandeliers, except for churches.
Mr* McCOIG:	Has the minister considered the fact that there are many people in humble circumstances who are contemplating the establishing of homes at the present time and who are anxious to obtain their furniture, etc., at reasonable prices? In view of the high cost of all materials to-day in every direction, the minister might put such a rate on chandeliers as would meet with general approval. If the minister would put a reasonable rate on - chandeliers it would meet with general approval.
Henry Lumley Drayton: I propose a
complete re-consideration of that item and I think notice was given of it.


Georges Henri Boivin: Notice was given that resolution No. 3 would be amended.


Henry Lumley Drayton: That has to do entirely with this question of chandeliers. In the meantime perhaps we can go on to other sections and deal with this particular item when we come to the point where it can be inserted.

Articles commonly or commercially known as jewellery, whether real or imitation, for personal use or for adornment of the person.


William Stevens Fielding: I ventured to offer the suggestion the other day that the minister might very properly make a distinction between the various grades of jewellery. I do not want to speak of "cheap" jewellery, because that conveys an impression of something that is trashy. But there is an expensive class of jewellery which is a luxury, and there is a class of jewellery used for the adornment of the person which is not a luxury. I ventured to suggest to the minister the other day that a gold wedr ding ring is not a luxury, nor is an engagement ring. The minister ought to draw a distinction between expensive jewellery which is clearly a luxury, and jewellery of an inexpensive character which is part of the ordinary, shall I say, things of life to a young lady. I do not think we should impose a tax which would treat all jewellery for the adornment of the person as a luxury.	.


Henry Lumley Drayton: The matter is specifically dealt with in the amended resolutions which were placed in Hansard but I do not think my hon. friend had the opportunity of looking at those proposals. Jewellery, as a rule, is sold by jewellers. But because it is not always sold by them, but is sometimes- sold by other people, it is necessary to retain these specific taxes which we have provided for and which the committee has been considering. But in so far as the jewellers themselves are concerned, it is proposed that they may not pay these taxes unless they desire. It is proposed that they may obtain a license and not pay the specific taxes on these articles but pay ten per cent on the whole of their turn-over. The amended proposition is:
Cigar and cigarette holders and pipes in excess of $2.50 each; cigar and cigarette cases; ash trays and match-boxes of gold or silver, humidors, and smoking stands; hunting and bowie knives; gold and silver-handled pocket knives and pencils, and gold fountain pens; gold, silver and ivory toilet ware; articles of silver not otherwise provided for in this resolution adapted for household or office use ; silver or gold deposit ware; articles commonly or commercially known as jewellery, whether real or imitation, for personal use or for adornment of the person.
Now that is the subject we are dealing with, and with the re-capitulation pratieally of all the specific jewellery taxes that have been applied on gold and silverware,, things

usually sold by the jeweller. Then we go on:
Any person, firm or corporation, including the jewellery branch of a departmental store whose chief business is the selling of jewellery by retail, shall obtain a special license to sell jewellery and other articles specified in this resolutioni, in which ease the tax payable shall be 10 per centum on the value of the total sales of such establishment or branch, under regulations to be made by the Minister, of Customs and Inland Revenue.
So that in -connection with all jewellery there will be no specific tax.


William Stevens Fielding: The last resolution takes it out of the twenty per cent class?
-Sir HENRY DRAYTON:	Takes it out
entirely and out of the 50 per cent list. It places it all in the hands of the trader -to do what he likes; but recognizing the undoubted underlying fact that jewellery shops are, to .a very large extent, luxury shops,, a tax of temper cent i-s put on the whole. Now I. think there ought to be -some exceptions made in that turn-over. The exceptions are-and I am putting them in because they -are sold particularly by the smaller jewellers and in competition with other people- stationery, not embossed stationery, but regular ordinary stationery; books, because many of them sell hooks; glasses-eye glasses, optical goods, spectacles. I should say spectacles and eye glasses, because I do not think that expensive -mother-of-pearl opera glasses and that sort of thing should be excepted, but rather the turn-over in the -ease of ordinary -spectacles and eye glasses. Stationery, books and -magazines should be exempt from this turn-over. They can withdraw that amount of their activities from their total turn-overs. Then there are cameras. I think they should also be deducted because in the case of cameras the manufacturer has to pay, under these resolutions, a royalty of ten per cent, so that cameras have already paid this tax. Therefore cameras -should be deducted and another article which is also sold by them, gramaphones and -gra-maphone records. Because gramaphones have also to pay a tax, the jeweller's ten per cent on his turn-over should not in my opinion include grama-phone sales.
-Mr. EULER:	In the case of umbrellas
and parasols, which are frequently sold by jewellers, what will the tax be?


Henry Lumley Drayton: They -will pay the full ten per cen-t on the turn-over.


John Harold: Do I understand from what the minister has said that tobacconists who
sell humidors, cigar cases and so come under that 20 per cent clause? Will they be charged a 20 per cent tax, while the jewelleT will only have to account for a ten per cent tax? These articles would be naturally sold,
I would say, much more by a tobacconist than by a jeweller. In case I am wrong in -my conception of the application of this taxation, I would like to have the point cleared up.	'	.


Henry Lumley Drayton: The extent of the taxation is, so far as the public is concerned, just as the hon. gentleman points out. Everything is made taxable in the jeweller shop with the exception o-f the few cases that I 'mentioned, whereas there is no tax at all on the great majority of things tobacconists handle. The jeweller will have to pay this- ten per cent. He pays on the whole thing just as it seems to him fit to do in the proper discharge of his business, and I do not think that any hardship is really thrown on the tobacconist. He is actually -getting off much easier than the jeweller.


William Stevens Fielding: At what stage-I suppose it will be a matter of regulation-will this tax be paid by the jeweller; semiannually?


Henry Lumley Drayton: We are thinking of making it payable monthly.


William Stevens Fielding: At all events it would have to be done toy regulation?


Henry Lumley Drayton: Yes, toy regulation and license.
Mr. ARMSTRONG (Lam'bton) I am -sure the jewellers will appreciate the concession granted by the minister, but there is one question I would like to ask him and it is this: On the stock which the Jjewellers have on hand to-day they have already paid the 71 per cent war tax on goods coming from the United States, and paid- a 10 per cent tax to the, manufacturer or wholesaler, making 171 peT cent in all on the goods that they now have in stock. Is it the intention of the minister to collect that 10 per cent on -goods now held by the jeweller?


Henry Lumley Drayton: Yes.


Joseph Elijah Armstrong: In addition to the other tax?


Henry Lumley Drayton: Yes.
The CHA-IRMiAiN: Is there any amendment on this particular item?


William Stewart Loggie: I would like to draw the attention of the minister to the words,

"whose chief business is the selling of jewellery."


Georges Henri Boivin: There is as yet no amendment before the Chair concerning "the chief business of selling jewellery." Consequently the Chairman is at a loss to know what the hon. member is discussing.


William Stewart Loggie: It is part of the amendment.


Georges Henri Boivin: I understood that the amendment did not come in at this stage. Will the hon. minister please say where this amendment is to be inserted in place of the words "articles commonly or commercially known as jewellery"? Or is it to be added to those words?


Henry Lumley Drayton: We are not
striking those words out at all, Mr. Chairman. I do not know that it really matters very much where this amendment is inserted. I think myself that it ought to form the subject matter of a separate section but it would be easier to insert it at the end of the section we are now considering, section (b).


Georges Henri Boivin: Shall the last item of section (b) be carried before we consider this?


Georges Parent: I notice that "articles commonly or commercially known as jewellery" are taxed at the rate of 20 per cent. I understand that it is the intention of the minister to tax the turn-over at 10 per cent.


William Stevens Fielding: This item should be struck out.


Henry Lumley Drayton: No.


William Stewart Loggie: Mr. Chairman, as I understand the situation-


Georges Henri Boivin: Shall this item carry, "articles commonly or commercially known as jewellery, whether real or imitation, for personal use or for adornment of the person"?


William Stewart Loggie: No, Mr. Chairman; I have something to say on that item, if you will allow me. Notwithstanding the explanation of the minister, I do not like the idea of that section being adopted. But first I want to- draw his attention to what seems to me to be an anomaly. By a subsection he proposes to grant -a license, he has told us, to jewellery stores, or to departmental stores that have a jewellery branch; and any country departmental store that sells

jewellery may receive a license subject to a tax of 10 per cent. But if it should be contended that jewellery is not their chief business, it would seem to me that a question might arise whether they are entitled to a license. For example, I carry in my mind's eye at the moment several country stores whose chief business would not be jewellery, but they would have a show-case of jewellery on the counter and, if you like to so describe it, a small jewellery branch.


Georges Parent: Cuff links.


William Stewart Loggie: I want to draw the minister's attention to that anomaly so- that he may provide for -a country store receiving a license t-o sell jewellery subject to the 10 per cent tax.


Joseph Elijah Armstrong: The regulations will cover that.


William Stewart Loggie: I do not know how regulations can run counter to what is in the Act. I am not very sure that it is right to- go into a jewellery store and pay 10 per cent on a certain article on which in another store you would have to pay 20 per cent. The minister tells us the reason is that the jeweller is paying a 10 per cent tax on all his stock. I admit there is some force in that circumstance, but I confess that I do not like the idea of this differentiation. A merchant who may not have a jewellery establishment may have some items of jewellery among his stock, for instance, cigar-holders and pipes. A man buys a pipe in a certain store and pays 20 per cent duty on his purchase, while in the next store he may be able to purchase a similar pipe and pay only .10 per cent duty. I do not know whether this can be overcome, but I am just drawing it to the minister's attention in the hope that he may be able to do away with this anomaly.


John Harold: By my previous remarks I do not wish it to be understood that I am desirous of making things hard for the ' jeweller. In fact I think that the proposal to bring the tax down to 10 per cent is a very good one. But I must say -that I do not believe that the proposition to have a flat rate of 10 per cent for jewellers is going to work out in practice. I agree with the former speaker (Mr. Loggie) in the illustrations he has given. Many tradesmen throughout the country handle jewellery as a side-line, for instance, stationers, fancy goods dealers and others. Now, if a jeweller in a large centre is t-o be charged only a 10 per cent rate on jewellery, and the trades-

man in the small town is to be charged 20 per cent on similar jewfellery that he handles as a side line, you are going to handicap the latter in his business, and I do not think that is the desire of the Government. I would suggest that the item be transferred to the 10 per cent section, and that no special license be necessary for jewellers.


Isaac Ellis Pedlow: I think the suggestion
made by the member for Brant (Mr. Harold) is absolutely fair. In addition to the classes of business mentioned by the member for Northumberland (Mr. Loggie) handling jewellery as a side line, I might mention gents' furnishing stores. It is an advantage to men going into such stores to be able to get cuff links and similar articles, but if a duty of 20 per cent is imposed on these articles when sold as a side line instead of 10 per cent when sold in jewellery stores, it will be a most unfair discrimination in favour of the latter. I think the suggestion of the hon. member for Brant is a good one and should be adopted.


Samuel Francis Glass: I also am strongly of opinion that this discrimination will create a great, deal of had feeling throughout the country. I think the suggestion of the member for Brant would meet the difficulty. It does seem entirely inconsistent that two men doing business side by side, the jeweller probably handling certain lines that are handled by his neighbour the 'tobacconist, should be treated in this way, one having 10 per cent and the other 20 per cent imposed on sales of similar articles. I realize the difficulty that confronts the minister, hut I am confident that this discrimination if permitted will create a great deal of dissatisfaction throughout the whole country. It is something that cannot be supported as fair; it is an unjust discrimination which will be resented. The proposal of my hon. friend (Mr. Harold) would be an easy way out of the difficulty and would possibly not materially affect the amount of taxes realized.


Henry Lumley Drayton: This is a nasty question; it is a difficult thing to get at. I suppose that really it depends upon which way you look at it. If we want to raise revenue, that is one thing; if, on the other hand, we want to be quite sure that the incidence of this 'taxation will be right in every single instance, why, we would never put on any taxes of this kind. Now, here is the great trouble in connection with luxury and jewellery taxes. The tax on jewellery is so easy to evade that so far no
very great amount has been raised in luxury taxes upon it. These taxes are not a new thing in this country; we are supposed even now to have luxury taxes on jewellery. I suppose not many hon. gentlemen know that there is such a thing, unless they were actually engaged in considering these'sections when they went through. But there is a luxury tax on jewellery at the present time.


Francis Ramsey Lalor: In Canada?


Henry Lumley Drayton: In Canada; I am not at all surprised that the hon. member knows nothing about it. There is a direct tax on jewellery to-day as a luxury. We have collected very little revenue through it-I think about $732,000. From trade sources I am told that there are approximately 2,500 jewellery shops in Canada and that they do ,a business on the average of $40,000 a year. That makes a pretty large turn-over, about $100,000,000.


Rodolphe Lemieux: Retail business?


Henry Lumley Drayton: Yes. A tax of ten per cent on that turn-over is a fairly large item. I do not think that we will get the whole of 10 per cent on that amount, because the chances are that this business will fall off. But let us turn now for a moment to the case that has been suggested, the tobacconist on the one side and the jeweller on the other. The tobacconist today is subject merely to a few specific luxury taxes, but every single thing the jeweller handles is subject to a ten per cent tax. If we say, to the tobacconist: You are paying ,a specific luxury tax on things which are, after all, foreign to your business; would you rather pay ten per cent on the whole amount of your turn-over? You would not find one tobacconist who would want to do it. The sale of these things by the tobacconist constitutes only a small percentage of his business. If that is not so, I would gladly put the tobacconist in the same position as the jeweller and impose a tax of 10 per cent on his gross sales. And surely it is not any hardship on the dry goods merchant to be told that if he goes into a side line which may be looked upon as a luxury, he must pay taxes on the goods in which he so dekls, because another person engaged in that business has to pay ten per cent on his whole turn-over. The dealer who goes into the jewellery business as a side-line finds that the goods -are subject to a 20 per cent tax in respect of the particular items while the jeweller pays 10 per cent on his whole turn-over; but

many things which jewellers sell are sold by other people without the imposition of tax. I think that all things will pretty well even up with each other. The great underlying necessity, after all, is the necessity for revenue. It does seem to me that we can better get a' revenue in this way and that there will not be very much difficulty when other people understand that they can get exactly the sort of treatment the jewellers are getting if they themselves want it.


William Stevens Fielding: I appreciate the efforts the minister is making to meet the situation and also the difficulties which have been suggested, particularly the difficulty which several hon. members have suggested of having a tax rate of 10 per cent on an article in one shop and 20 per cent on a similar article sold in another shop. But can we not avoid that by making a distinction between the different classes of jewellery? Suppose we retain the wording of this item:
Articles commonly or commercially known as jewellery, whether real or imitation, for personal use or adornment of the person.
Add the words "not otherwise provided for," put that item in the ten per cent list; then repeat the item in the 20 per cent list in the case of articles of jewellery of value greater than J}50. Then you have no question of discrimination between different stores; you have the same tax on a given article, no matter where it is sold, but you make a distinction between the moderately-priced article and the high-priced article which is unquestionably a luxury.	.


Henry Lumley Drayton: (If the hon.
member would change his value say to $2 he would then cover pretty nearly all the articles of jewellery that are carried in dry goods stores,-collar buttons and all that kind of thing. Perhaps we could make it $5 and transfer it to the 10 per cent tax/ making the present item refer merely to jewellery selling at mofe than $5 per piece.


William Stevens Fielding: I do not know that my hon. friend has caught my point. I would make a distinction between expensive jewellery and inexpensive jewellery. Just what is the proper figure for inexpensive items may be a matter of debate. I suggested $50; make it less if you like, but make provision that the rate shall be the same no matter where the article is sold. Let there be no discrimination.


Andrew Ross McMaster: I do not propose to
attempt to sketch in detail what the min-

ister should do in connection with this matter, but I do say with great confidence that the minister must not tax an article at 20 per cent in one store and at 10 per cent in another. That goes to the very foundation of proper taxation. The tax must be equal; if it is upon goods, goods of the same value, wherever found, must pay the same tax. The minister speaks about the necessity for obtaining revenue. We are all with him in that but to commit a flagrant injustice in collecting revenue would in the long run defeat the very object that was had in mind.


Henry Lumley Drayton: Will the hon. member point out where the flagrant injustice is and who is affected by it? Is it on the jeweller, or is it on the other person who is selling cheap jewellery? We are suggesting that the other person will be willing to take the same terms that the jeweller takes; and if the injustice be on the jeweller, the matter of fact is that jewellers prefer this method because they know that, with their clerks handling the many different lines that are handled, it would be impossible to carry out the law in any other -way, because things can be so easily manipulated in that business. If there be any injustice to anybody, the way to clear it up is first to define the injustice and not to talk in generalities. Who is hurt-the jeweller or the other man?


Andrew Ross McMaster: The other man.


Henry Lumley Drayton: Then the other man can have the same opportunity as the jeweller of taking out a license and paying 10 per cent on his turn-over. -


Andrew Ross McMaster: Will the license not cost him money?


Henry Lumley Drayton: There is nothing in the license. He can take out a license and pay 10 per cent on his turn-over.


Andrew Ross McMaster: But will that turn-over include other articles than jewellery?


Henry Lumley Drayton: Yes. We are doing this with the jeweller, because he handles so many things which are really luxuries. He has to pay, for example, on things that may be sold by a hardware man, but he will pay the tax just the same. This tax includes the whole of his turn-over, on the theory that the articles sold are really luxuries. There is no tax on any article as1 such when sold by a jeweller; the tax is gone. The fact is that if you purchase something from a man who does not pay the whole 10 per cent on his turn-over, jmu pay a tax on that article,

but you can go to the jeweller and you will be charged no tax except what the jeweller chooses to put on, which may be a good deal more in order to cover the tax.


James Robert Wilson: How does that apply to large departmental stores which carry jewellery? Will they pay 10 per cent?


Henry Lumley Drayton: Any person engaged in the jewellery business and in the class of articles a jeweller ordinarily handles which may not be subject t-o any tax at all, will, if he chooses to take out a license, be given exactly the same treatment as. a jeweller.


Mr. ROSS:: The minister has not put
that proposition before the committee in these resolutions.


William Stewart Loggie: The present suggestion of the minister that it will be necessary for a departmental store in a country place carrying the same articles as a jeweller would carry in a city, to take out a license, is, to my mind, impracticable. If you attempted to carry out that suggestion, you would find that stores in country places would be discriminated against, because while they might carry jewellery, they certainly would not carry many of the articles that are supposed to be carried by jewellers in cities. What I understood was that, even in a Country place, any departmental store that had a jewellery department, would be entitled to get a license for whatever articles they kept that would come under this list. That is why I drew the attention of the minister to the word "chief," because this would not be the chief business of a departmental store in a small town. The minister's explanation now is that a departmental store in a small town can get a license provided that it carries the other class of goods usually carried by jewellers in large cities. That class of goods is not sold in departmental stores in small towns, and I should like the minister to consider the matter and strike out the word "chief." You could, not say that Eaton's jewellery branch was the chief business that firm was engaged in.


Jacques Bureau: What about Woolworth's five, ten and fiften cent stores?


William Stewart Loggie: That is another consideration altogether. Can departmental stores in small towns take out licenses to sell jewellery and everything else that they carry that is included in this list.


Henry Lumley Drayton: They can. There is no difficulty about that at all. That is the idea; but if they do that, they have to do it subject to regulations, and those regulations
will provide that whatever they sell-they do not have to put into stock all articles of the kind that a city jeweller handles- which would ordinarily be sold by a jeweller or form part of a jeweller's ordinary business, whether it was jewellery or otherwise, would have to be included in that department, and the 10 per cent would have to be paid on all that.


William Stewart Loggie: That would be all right.


William Stevens Fielding: What the minister proposes may be an improvement on his first resolution, but I think he has still failed to give careful consideration to the suggestion I made. Why should there be any need of a license? Why should we have to have a turn-over tax in the case of a jeweller? Why should we have any question as to difference of rates as charged on any article of jewellery in one shop or another? Why should the minister not provide that on any article up to a value of $50, say, the tax shall be 10 per cent, and if the value is more than $50, the tax shall be 20 per cent? I see no difficulty in that and if there be a difficulty, nobody has suggested it.


Henry Lumley Drayton: I would meet the suggestion made by my hon. friend, but to a much smaller extent in value than is suggested is too high. It kills the object of stores carrying cheap lines of jewellery, generally cheap cuff links, collar buttons and that sort of thing, just for the convenience of customers, not because they want to make anything out of the matter at all. I know I 'have bought things of that sort there myself. If you were to make the item read:
Articles commonly or commercially known as Jewellery, whether real or imitation, for personal use for adornment of the person, at a price not exceeding some nominal sum, perhaps $2, $3, $4 or $'5.
The case would.be met as regards that particular part of the trade.


Isaac Ellis Pedlow: 


William Stevens Fielding: One cannot buy much except trash in a jewellery shop for $2.


Francis Ramsey Lalor: The tax-of 20 per cent as
suggested is too high. It kills the object of the resolution: first, it kills the business of the man who is handling the goods, because he will find it difficult to sell goods which are subject to a 20 per cent tax and, second, revenue will not be obtained because the business will be killed. If the tax were lower, the hon. member's suggestion, would be better.


Samuel Francis Glass: The difficulty that presents itself is. as regards discrimination, and another way of meeting that difficulty is worthy of consideration. There are in the schedule a few items on which a higher duty is imposed than that imposed upon jewellers. The list, which is enumerated, is not a very large one. Certain of those articles are ones which a jeweller invariably carries, for instance, fountain pens, pencils, humidors', etc. which are really foreign to his business although he has a perfect right to carry them. Why cannot a tax of 10 per cent be imposed upon the jeweller except on items otherwise specified in the schedule which bear a higher rate and which he may carry in stock? A jeweller would have no difficulty in keeping track of sales made of humidors, fountain pens, pencils, etc. In that way the difficulty would be got over. No matter how much we may apologize for or try to explain the difficulty Parliament is supposed to surmount difficulties, and you cannot call it a just or sound principle to impose a different rate of taxation on two stores side by side selling the same articles. If it is not possible for the minister to meet this difficulty now, I would suggest that the item be postponed for further consideration, for trouble is bound to arise from any such discrimination as is here proposed.


Henry Lumley Drayton: I beg to add after the word "person" in this item the words "in excess of five dollars," and also to add to sub-paragraph (a) the item:
Articles commonly or commercially known as jewellery whether real or imitation, for personal use or for the adornment of the person not exceeding $5 in value.


William Stevens Fielding: I entirely approve of this step but I think the figure is too low. You cannot buy much for $5 in a jewellery shop. If my hon. friend wants to make any concession to the average middle-class person, the figure should be more than $5. However, if that is his determination, we Cannot help it.


John Harold: I should just like to say, in view of the remarks I have made, that I am entirely satisfied with the resolutions as they now stand, which seem to me to meet the situation very well.


[Stage Direction]
Amendment agreed to.
Henry Lumley Drayton: I beg to move to amend sub-paragraph (b) by adding thereto the following:
Any person, firm or corporation, including the jewellery branch of a departmental store whose chief business is the selling of jewellery by retail, shall obtain a special license to sell jewel-

lery and other articles specified in this resolution, in which case the tax payable shall be 10 per centum on the value of the total sales of such establishment or branch, under regulations to be made by the Minister of Customs and Inland Revenue.


[Stage Direction]
Amendment agreed to.
(c) A tax of fifty per cent on :-
Articles of gold not otherwise provided for in this resolution adapted for household or office use.
Andrew Ross McMaster: What are these articles of gold not otherwise provided for? A fifty per cent tax is almost prohibitive, and it would be interesting to know just what this item covers.


Henry Lumley Drayton: Solid gold plate, for instance, gold dining services, solid gold boxes.


William Stevens Fielding: Do you expect to get much revenue from that?


Henry Lumley Drayton: None I think, but the tax may prevent some gold being used in that way.


Georges Parent: If you reduced the tax to 10 or 15 per cent you would have a chance of getting some revenue, but with the 50 per cent tax you will get none at all from this source.


Jacques Bureau: It is to prevent gold being used for these purposes, not to raise revenue.


Georges Parent: Would not this be the proper place to provide that wedding rings shall be excepted?


Henry Lumley Drayton: There is no reason in the world why that should not go in, and I have pleasure in moving to add the words "except wedding rings."


[Stage Direction]
Amendment agreed to.
William Stevens Fielding: Engagement rings too?


Henry Lumley Drayton: 1 am afraid I cannot go as far as that.


Georges Henri Boivin: Shall sub-paragraph (c) carry?


Henry Lumley Drayton: With the amendment which I have suggested, "not including gold pen nibs."
At Six o'clock the House took recess.
After Recess.
The House resumed at Eight o'clock.



PRIVATE BILLS.


[Stage Direction]
Bill No. 164 (from the Senate), for the relief of John Durose.-Sir Sam Hughes.

Bill No. 170 (from the Senate), for the relief of Edith Ellen Holmes Austin.-Mr. Mowat.
Bill No. 171 (from the Senate), for the relief of Ethelbert Gilmour Harris.-Mr. Arthurs.
Bill No. 172 (from the Senate), for the relief of Albert Ernest Wice.-Mr. Boys.
Bill No. 173 (from the Senate), for the relief of Peter Sutherland Cowie.-Mr. Mowat.
Bill No. 174 (from the Senate), for the relief of Roy Bradley.-Mr. MacNutt,
Bill No. 175 (from the Senate), for the relief of Joan Doran.-Mr. Mowat.
Bill No. 176 (from the Senate) for the relief of Alexander Ross, Junior.-Mr. Mowat.
Bill No. 177 (from the Senate), for the relief of Jean Mary Sandford.-Mr. Porter.
Bill No. 179 (from the Senate), respecting the Colonial Investment and Loan Company.-Mr. Mowat.
Bill No. 181 (from the Senate), to incorporate the Great West Bank of Canada.- Mr. Cowan.


[Stage Direction]
House again in Committee of Ways and Means, Mr. Boivin in the Chair.
Georges Henri Boivin: When the committee
rose at six o'clock it had under consideration paragraph (c) of the first resolution to amend the Special War Revenue Act, 1915. Shall paragraph (c) carry?


Mr. RINFRET:: I must point out to the Minister of Finance (Sir Henry Drayton) that by imposing a tax of 50 per cent on all articles of gold " not otherwise provided for" he is taxing very heavily gold medals that are given by colleges, schools and other institutions by way of reward to pupils. I do not think it is the intention of the minister to tax these articles, and I fancy it must have escaped his attention. I would therefore ask him to reconsider the item, and possibly amend it so as to except from its operation these gold medals.


Henry Lumley Drayton: In view of the general tax on jewellers of ten per cent of the turnover, as suggested, I think my hon. friend will see that the medals, which are always made by jewellers, will not be affected at all.


Louis Édouard Fernand Rinfret: Does the minister think that these gold medals should even pay a tax of 10 per cent?


Henry Lumley Drayton: I think that
the jewellers might very well pay 10 per cent of their turnover. It is a very moderate tax.


[Stage Direction]
Item agreed to.
Georges Henri Boivin: We shall now take
the new paragraph (d) containing the amendments suggested this afternoon by the Minister of Finance:
(d) That the following excise taxes be imposed, levied and collected on so much of the amount paid for any of the following articles as is in excess of the price hereinafter specified as to each such article:-
A tax of ten per cent on,-
Carpets and rugs in excess of $6 per linear yard, twenty-seven inches in width.


James McCrie Douglas: I would
ask the minister to explain just how he is going to designate the size of a rug. The designation is by the linear yard in the case of carpets, but in the case of rugs it should be square yards. Should there not therefore be some designation of the size of rug in the item?


Henry Lumley Drayton: The linear
measurement with respect to rugs.is twenty-seven inches just as in the case of carpets. The measurement will be, in width 27 inches, by the yard.


[Stage Direction]
Item agreed to.
A tax of fifteen per cent on,-
Boots, shoes, pumps and slippers of any material (not including shoes or appliances made to order for persons having a crippled or deformed foot or ankle, or to top boots not less than twelve inches in height such as are used in lumbering, mining and fishing industries, or to river driving boots fitted with caulks on soles thereof) in excess of $9 per pair;
Henry Lumley Drayton: There is one
thing that I should cut out in deference to the suggestions made by hon. gentlemen. My abject in the whole of this scheme of taxation is to see that the necessary objects of these proper industries are not taxed. I would therefore move that the words, "fitted with caulks on soles thereof" -which is a limitation on river-driving boots-be excised so that the clause would read, "or to river^driving boots," without the addition, "fitted with caulks on soles thereof."


Thomas Wakem Caldwell: I thought I understood the minister to say this afternoon that he reduced the leg's of miners' boots from twelve to ten inches.


Henry Lumley Drayton: That is a matter in regard to which I was perfectly willing to meet the suggestions of hon. mem-

bers. I therefore move that the height be ten inches.
'The CHAIRMAN:	The item now reads
as follows:
Boots, shoes, pumps and slippers of any material (not including shoes or appliances made to order for persons having a crippled or deformed foot or ankle, or to top boots not less than ten inches in height, such as are used in lumbering mining and fishing industries, or to river driving boots) in excess of $9 per pair.


[Stage Direction]
Amendment agreed to, and item as amended agreed to.
Cloth overcoats, men's, boys' women's and misses; in excess of $'50 each.
Isaac Ellis Pedlow: I think I called the attention of the committee this afternoon to the faet that for suits, either for ladies or gentlemen, more material is required to make a suit than to make an overcoat. Consequently I cannot understand why the price in excess in the case of overcoats is made higher than the price in excess in the case of suits. We know as a matter of actual experience-bearing in mind the labour, trimmings, and the yardage of material-that it costs more to make a suit of clothes from the same class of material than it does to make an overcoat. Consequently I would think that if these prices were reversed it would be more correct. However, I would he in favour of the proposition being the same in the case of both suits and overcoats.


Henry Lumley Drayton: It was felt that for overcoats people have to have heavier ,cloth-cloth with more wool in it-even if there is actually less yardage. Wool is worth so much per pound, and we thought that was not an unfair addition.


Isaac Ellis Pedlow: The explanation seems to be reasonable hut it does not work out in practice. As a matter of actual experience overcoats and suits are very often of the same material. So far as regards expensive linings, I know as a matter of fact that linings are in either case according to the judgment of the customer or of the tailor and may or may not he the same valqe; but taking it all around I think in actual experience the value of the finished garment in either case would he about the same. I would suggest that the minister make a change and have the prices in both cases the same-either $45 for suit or overcoat or $50, as the case may be. I would suggest $50 as a compromise.


Mr. JACOBS:: I have not the amended resolutions before me, but do I understand

that women's coats and men's coats are fixed at $50 beyond which the excess tax comes into play? It seems to me some sort of relief ought to be given in the matter of women's coats. In the case' of these garments we have to make allowance for the fact that the fashions change almost overnight. They have to be provided with furbelows, ribbons, buttons and things of that kind, so it is almost impossible to secure women's coats for anything under $50. It seems to me that if a man's coat is sold for $50 there ought to be given at least a little leeway for the woman's coat, and it should start at $60. Otherwise this Parliament will be under the imputation of enacting man-made laws.


Georges Henri Boivin: 'Shall the item carry?


Samuel William Jacobs: I "would like to have the minister's views on this matter as it seems to me the point I have raised deserves some consideration.	.


Henry Lumley Drayton: Consideration has been given to the superior case of the ladies in making their suits $60 as against men's suits at $45. When, however, it comes to an ordinary overcoat which is for the purpose of keeping them warm we think we should get just the same amount and that is what is put in.


[Stage Direction]
Item agreed to.
Dresses, women's and misses', except silk, in excess of $45 each;
Edmond Proulx: I would like to see the exception as to silk dresses eliminated. I do not think there should he any discrimination. If you are going to discriminate it will increase the price of cotton and other materials.


William Stewart Loggie: I would like to draw the attention of the minister to the fact that he has made no provision for ladies' silk dresses. In the case of wool dresses he has put the price at $35, and $15 for the skirt; but there is no provision made for dividing a silk dress-that is so-much for the skirt and so much for the coat. Inasmuch as the minister is making a division for garments made from woollen materials, I think it would perhaps be fairer that he also make a division for garments made of silk. I endorse the views of the hon. gentleman who has just sat down. I cannot see why there should .he a discrimination against, garments of the same price made of silk; if we were placing a higher value on silk garments, I could understand why the* difference should be made.


Edmond Proulx: I move that the -words
"except silk" be struck out. I think we should look after the interests of the women. They are not represented in this Parliament.


An hon. MEMBER:: They will 'be soon.


Edmond Proulx: If we accept the statements made, the women are more heavily taxed than the men. I move that the words be struck out.


Henry Lumley Drayton: This matter was discussed this afternoon.


Mr. GAUVREAU:: It is a waste of time.
'Sir HENRY DRAYTON: We look upon silk as a luxury, as something that is not good for all-the-year-round wear, and we are thinking of people who are buying clothes for use all the year round. That is why we have not got silk dresses dealt with separately. All silk garments are taxable.


William Stewart Loggie: I do not quite concur in what the minister has said.


Some hon. MEMBERS:: Order.


William Stewart Loggie: He speaks of silks as being a luxury, and yet he is exempting silk ribbons up to 60 cents a yard.


Edmond Proulx: I move that the words "except silk" be. stricken out.


An hon. MEMBER:: You have no seconder.


Georges Henri Boivin: It is not necessary for the hon. member to have a seconder. If he is going to strike.out the words "except silk," he is placing silk dresses in the class which is subject to the payment of taxes, and he is accordingly moving to impose a tax on silk dresses. A private member has no right to- move the imposition of a tax, and 1 must therefore declare his amendment out of order.


Edmond Proulx: Mr. Chairman, I understand that if those words are stricken out all silk dresses will be taxed. I want to put silk dresses on the same plane as other dresses.


[Stage Direction]
Item agreed to.
Suits, women's and misses, except silk, in excess of $60 each.
William Stewart Loggie: Over what value will the tax be on a silk overskirt?


Henry Lumley Drayton: The tax applies on all silk manufactured garments whether they be overskirts or anything else.


William Stewart Loggie: As I understand-


Some hon. MEMBERS:: Order.


William Stewart Loggie: The question I want to ask-


Some hon. MEMBERS:: Order.


Mr. COPP:: Mr. Chairman, we -could not hear a word of what the hon. gentleman was saying, and we do not know whether he was referring to overskirts or not.


[Stage Direction]
Item agreed to.
2. That the excise taxes as imposed by the preceding resolution shall be paid by the purchaser to the vendor at the time of sale for consumption or use, or on importation for consumption or use other than for re-sale, in addition to the duties of customs already imposed, and by the vendor to His Majesty in accordance with such regulations as may be prescribed1.
James Alexander Robb: In my judgment this clause will add very considerably to expense of collection, for according to the minister's statement this afternoon there are 200,000 retail merchants in Canada, and therefore an army of clerks will be required to check up sales, and even then I question very much if the minister will be able to keep strict tab on all business. I. was going to suggest that he adopt the stamp system of collecting these taxes. The import duties will be collected by the customs house officers at the port of entry. Then the tax on the retail sales made over the counter could be paid by means of stamps affixed to the article sold, and in that way you would, make every customer an inspector to see that the taxes are paid. On bills of exchange our hankers are compelled to affix a stamp, and surely they are able to take care of business as well as our retail men. That system having been adopted by the Government "in connection with bills of exchange and also in connection with proprietary medicines, it seems to me that the minister might well extend it, for it will collection, and at the same time it will also save our retailers a great deal of expense and trouble.


Isaac Ellis Pedlow: I was going to make
exactly the same suggestion. If that plan be adopted it will eliftinate the necessity for retailers using triplicate cheque books, and it will save their time and the time of the Inland Revenue Department. The many trifling sales will make the method proposed under the schedule very costly. The adoption of the plan suggested by the hon. member for Huntingdon (Mr. Robb) will also assure the Government the payment of the taxes before they are really due; that i3 to say, the retailers in every case would have to keep on hand a supply of inland reve-

nue stamps to cover their business requirements, and no great hardship would be imposed on our retail trade. I assume that merchants would not be averse to investing a reasonable amount in inland revenue stamps to be used in this way. The effect would be to simplify matters very materially and to reduce the cost of collecting the money.


Henry Lumley Drayton: If it is a plan which we can work out I think we ought to adopt it because it would make the collection of the tax easier for the retail merchant, and we ought to make his burden as light as possible, so long as the principle of the legislation is not lost sight of. This resolution does not say whether the payment is to be made in cash or in stamps. We hope to be able to work out a stamp system which will look after the whole thing; we propose to take power in the Bill to provide for the issue of stamps for this very purpose. I desire to amend the section by adding after the word "re-sale" the -words "on the duty paid value".


Isaac Ellis Pedlow: With regard to the application of the words "or use other than for re-sale", may I ask whether goods bought by dressmakers from departmental and other stores for re-sale will be exempt?


Henry Lumley Drayton: The underlying idea is that only one luxury tax should be paid, and that the only exception should be in the case of goods imported for the purpose of re-sale. I do not know how it would work out in the case my hon. friend mentions; that is something which, perhaps, we should provide for in the Bill. I shall be pleased to consider the point raised by my hon. friend.


Isaac Ellis Pedlow: When the dressmaker
sells the finished garment she is supposed to value it as a whole for taxation purposes. If she pays the tax when she buys the material from the merchant, the tax would have to be paid a second time when the garment was sold,-either that, or the garment would evade the tax altogether.


Georges Parent: Do fhe words "duty paid value" mean value in Canadian money?


Henry Lumley Drayton: Yes.


[Stage Direction]
Amendment agreed to, and resolution as amended agreed to.
3. That the following excise taxes he imposed, levied and collected on the articles hereinafter specified, namely:-
(a) A tax of ten per cent on:-
Boats, yachts, canoes and motor boats. Provided that on satisfactory proof being furnished

that these articles will be used only for trading or commercial purposes a refund of the amount paid under this resolution shall be granted ;
John Archibald Campbell: I wish to point out that prospectors and others who buy canoes usually take them away immediately into the north country or wherever they are going and it is an unnecessary hardship to ask them to pay the tax at the time of making the purchase and then- wait an indefinite length of time foT -a refund. I suggest that it would be a more satisfactory arrangement if proof of use for trading or commercial purposes could be furnished at the time the article is purchased, so that the transaction may be completely closed at that stage. I do not see that there would be any objection to that. Am I right in -assuming that "trading or commercial purposes" would include prospecting?
-Sir HENRY DRAYTON:	This tax is
entirely on the manufacturer. I do not think it will make any difference so far as the purchaser is concerned.


Joseph Elijah Armstrong: Does this apply to boats already contracted for?


Henry Lumley Drayton: It would. apply to any boats undelivered on the 19th of May.


William Duff: II should like to make a suggestion the adoption of which would greatly simplify this provision. In the business in which I am directly interested, many boats and motor boats are required, and if the minister allows this resolution to pass as it stands, be is going to impose a great hardship upon a number of men who live in out-of-the-way places,

not only manufacturers but men who purchase these boats. 'Perhaps the minister is aware that in the different fishing settlements', not only on the Nova Scotia coast but on the New Brunswick coast, the Gasp6 coast and also the Pacific coast, there are men who are known as boat-builders. Such a man may get an order for one boat, a dory of 20 feet in length, or a small boat of the same length, but of a different pattern, or a motor boat of small size intended for fishing purposes, or a large boat intended for off-shore fishing. These boat-builders are situated sometimes on islands and other out-of-the-way places along the different coasts. They are not boat-builders in the ordinary sense of the term; they are not business men, and they keep no accounts. A man may come to one of them and ask him to build a dory or half a dozen dories, and when the contract is completed, the man comes and -pays the

amount and no acoount is kept ol the transaction. The minister could simplify the matter very much if he would amend the clause to read:
Boats, yachts, canoes and motor boats for purposes of pleasure.
I think that would cover what the minister wants, because I understand that the only people from whom he intends to collect the tax are people who buy these boats for purposes of pleasure. I would respectfully suggest to the minister that if he would amend the clause to read in that way, he would save a great deal of trouble and annoyance to men who eke out their living by building boats.
Mr. McGlIBBON (Muskoka):	I should
like to endorse the sentiments of my hon. friend (Mr. Duff) and the hon. member for Nelson (Mr. Campbell). The object of this tax is to collect money from those who buy boats, canoes and motor boats for pleasure, not from those who intend to use them for legitimate business purposes. As very hon-memfoer knows, such boats are absolutely necessary for carrying on certain lines of business, and it is a wrong principle to tax that class of individuals.


William Stevens Fielding: 
Henry Lumley Drayton: 
Arthur Trahan: What about canoes?


William Stevens Fielding: The remainder of the
clause should be striken out.


Henry Lumley Drayton: The clause might read:
Provided that on satisfactory proof being furnished that these articles will be used only for trading or commercial purposes the tax will not be collected.


William Duff: How does -the minister intend to get the necessary satisfactory proof from all parts of Canada on every boat that is built?


Henry Lumley Drayton: I would think a cetrificate from any reputable citizen would be sufficient.


William Duff: II the minister intends to bother every reputable citizen in my town-


Henry Lumley Drayton: The hon. gentleman will know the boatrbuilders, and 1 have no doubt they are reputable citizens he is speaking for.


William Duff: Absolutely.


Henry Lumley Drayton: I have no doubt it will be quite easy for them to send in their certificates, and that will be -sufficient. Should any doubt arise in the mind of the department, it is very easy to check the matter up; a local collector could easily look alter the matter, and no- trouble would arise so long as we provide that the tax shall not be paid on boats used for trading or commercial purposes. I entirely agree that the tax should not be collected if satisfactory proof is given that a boat is to be

used only for trading or commercial purposes.


William Stevens Fielding: The minister's suggestion that the clause shall read: "The tax will not be collected"-is simply putting in another form the suggestion of my hon. friend (Mr. Duff). What is the objection to saying that the tax shall be collected simply on pleasure boats? A fisherman may, of course, occasionally go off on a pleasure trip with his boat; but for all practical purposes it is used for fishing purposes, and the distinction between a pleasure boat and a fishing boat is well understood in the community. Therefore, if the minister will accept the suggestion of my hon. friend, there will be no difficulty at all.


Henry Lumley Drayton: I agree that a fishing boat used on occasion for pleasure will still remain a fishing boat; but the hon. member will appreciate the fact that if we say that the tax shall be collected only on pleasure boats, and leave the matter at that, there is no check; the door is left wide open. If on the other hand we say that the tax is not to be charged on boats to be used for trading or commercial purposes, we shall have a check on the matter. I will strike out the word "only" in order to meet my hon. friend's point, because I do not wish to take any technical objection against fishermen; as long as a boat is an appropriate boat for fishing purposes and in the main is used for that purpose, it does not matter how much the boat is used for pleasure purposes.


William Daum Euler: What would be done in the case of a boat built for fishing purposes and shortly afterwards transferred to be used for purposes of pleasure?


William Duff: I am afraid the minister in making this suggestion is not quite consistent. First, he told me, in answer to a question, that if he adopted my suggestion, all boats which would be built would be commercial boats, and in that way he would not collect any tax; but.shortly afterwards, when I asked how he intended to get satisfactory proof in regard to this matter, he said that he presumed all builders of boats were responsible or reliable men. If they are responsible or reliable citizens, they are not going to sell pleasure boats and call them commercial boats. So the minister's argument falls to the ground. There is a distinct difference between commercial and pleasure boats. No man can got a pleasure boat built for him and call it a commercial

boat, because there is a distinction between the two which the builder and the owner cannot get over. Therefore, instead of running around getting some man to certify that the boat which he built for John 9 p.m. Jones was a commercial boat or a pleasure boat, I think it would be more businesslike if the minister adopted some such simple suggestion as I have made which covers the ground absolutely and would avoid all trouble.


William Stevens Fielding: I think what the minister now proposes will accomplish almost exactly the same thing. He proposes to say that boats1 for commercial purposes' shall not pay the tax. He is not going to call for a certificate from anybody. He will leave those words out, I take it. It is to be a matter between the tax collector and the builder.


Mr. McGIBBON (Muskoka):: I would
urge the minister to adopt the suggestion of the hon. member (Mr. Duff) and restrict the tax to pleasure boats only. Let us make it definite and positive so that there will be no doubt about it. We do not want to tax a boat that a man is going to use in making his living. I think the suggestion of my hon. friend offers a very simple way out of the difficulty.


Mr. NICHOLSON (Algoma):: There is
a large class of boats that I think, some hon. members are losing sight of altogether. On the inland waters of this country, I believe, there are half a dozen canoes to every motor boat or any other type of boat. The manufacturers of these canoes make identically the same canoe for commercial and pleasure purposes, and ship them out in carload lots to different parts of the country. Perhaps half are purchased for commercial purposes and the other half for pleasure. The manufacturer pays the tax without any idea whether the canoes he ships are going to be used for pleasure or commercial purposes. In the district where I live these canoes are bought by prospectors for running the rivers and lakes, and by the Indians for trapping purposes. As many of them are used in that way as for pleasure, and the boat is identically the same.


William Duff: My hon. friend says that in his district identically the same canoe is used for commercial purposes as for pleasure, but I think other hon. gentlemen know that the canoe for commercial purposes is built much stronger than the pleasure canoe and is not so well painted or fixed up. I am sure that in other districts

there is a very great difference between the two canoes, and anybody who uses canoes will bear me out.


Donald Nicholson: I would
undertake to say that the Chestnut Canoe Company of New Brunswick ships into Ontario and the West thousands of identically the same kind of canoe, a large number of which are used for commercial purposes and a large number for pleasure. The man who wants a canoe for .pleasure purposes decorates it himself if he wants it decorated. The same is true of motor boats to a very large degree. Many motor boats that are manufactured for pleasure purposes are afterwards used for commercial purposes, and vice versa.
Mr. iCAMiP/BBLL : I wish to endorse the statement of the hon. member for Algoma East (Mr. Nicholson). Canoes are shipped into Northern Manitoba from companies down East by the carload. There is a certain class of canoe known as a "freighter" about which there would not be any difficulty at all, but there is another class that might either be used for pleasure or for trade, by a prospector, for instance. There is no difference in the make-up of these canoes, and there would he great difficulty in determining to which class they belonged.
IMr. EULER:	Does this apply only to
new boats as they come from the builder, or will it apply also in cases of transfer? A man might buy a boat for commercial purposes to-day land a week afterwards transfer it to a man who is going to use it for pleasure, and in that way evade the tax.


Henry Lumley Drayton: If frauds of that kind were being perpetrated, appropriate measures would be taken. I think perhaps hon. gentlemen will see from the discussion that has taken place the difficulty of dealing with this matter except in the way I have proposed, with the modification I have proposed. It is perfectly clear that the very same boat can be used for commercial purposes and for pleasure, and you cannot tell from the design or anything else for which purpose it is going to be used. The question is this: Are pleasure boats to be exempt? That is all that it comes down to in connection with this luxury tax. Are yachts, canoes and motor boats to be exempt because although they are pleasure boats, they may be used for commercial purposes? I wanted to meet the objections made by hon. gentlemen, and it seemed to me that I did meet them absolutely when I said that we 228
wouldi charge no tax whatever on a boat that was manufacturer for commercial purposes. I think it would be impossible to deal with the matter in any other way.
The 'CHAIRMAN: Will the hon. minister repeat his amendment?
8ir HENRY DRAYTON:	I strike out
the word only" in deference to what my hon. friend from Shelburne and Queen's (Mr. Fielding) says. I move to amend the first item of paragraph (a) of resolution 3 by striking out the word "only" in the second line of said item and also the words "a refund of the amount paid under this resolution shall be granted" and substituting for the latter the words "the said tax shall not be collected."


[Stage Direction]
Amendment agreed to.
Mr. iOOCKSHUTT:	The word "sale" is
not mentioned in this paragraph at all, although I understand that the tax is to be collected when a boat is transferred from the manufacturer to the purchaser.
'Sir HENR\ DRAA TON: If my hon. friend will look at resolution No. 4 he will find that it provides that these taxes shall be payable at the time of sale.
Mr. OOCKSHUTT:: Is this going to apply to second-hand boats which are resold? It would not appear from a reading of the clause that it does, but a very large business may be done in second-hand boats which are at present in possession of individual owners. In order to evade the tax or for some other reason a great many people will buy second-hand boats, and under this clause I do not find anything as to whether second-hand boats which are transferred from their present owners to others will come under the terms of the Act. I should like to know if they will, or if this only applies to new boats bought from the builders. *A further point:	As
has been pointed out, many boats are used for pleasure only, but boats that are used exclusively for business purposes might be employed by their owners on Sunday or on some special holiday for pleasure. Would such a use be regarded as a violation of contract, as the minister understands the situation? The public would want to know whether they were violating any confidence if boats which were acquired as commercial boats were occasionally, on holidays or Sundays, used for pleasure. I know the minister does not desire to be harsh with people, but in the clause I cannot find any exception in that regard.


Henry Lumley Drayton: In regard to
the first point, this is a tax on the builder who makes, the boat; it does not apply to second-hand boats. In answer to the second point, the word "only," on the request of the hon. fnember (Mr. Fielding), has been struck out, so that a boat may be used for pleasure purposes so long as its real purpose is a trading and commercial one.


Peter McGibbon: Will an
affidavit from the manufacturer be sufficient to designate the purpose?
/Sir HENRY DRAYTON: I do not think it need go as far as an affidavit. I see no reason why people should pay commissioners for taking oaths in this matter, which is one that can easily be checked.


Oliver Robert Gould: I see no provision made
for a tax on a new industry which is very much in evidence in this country at the present time. We have aeroplanes, which are absolutely commercial conveyances, and the manufacturers expect to do a much larger business in the future than in the past. I think that provision should be made for taxing all aeroplanes or air boats, if you prefer to call them so, and I would direct the minister's attention to the fact that no such provision exists.


[Stage Direction]
Item agreed to.
Candy and confectionery.
Henry Lumley Drayton: I desire to
move an amendment to this item. As it stands, the tax would apply to children's candy, the small, little one-cent sweets. I do not know how you would deal with those unless you made them two cents instead of one cent, and in any case I do not suppose that hon. members would like to do that. There is something else to which the tax applies at the present time and to which I suppose hon. members would rather not have it apply. Under the customs rulings, when a cake has icing on it it becomes a confection, and I confess that was news to me; I did not think we were taxing cake as confection. I therefore desire to move that the words "candy and confectionery" be struck out and that the following 'be substituted therefor.
Confectionery which may be classed as candy or a substitute for candy; (this item not to include goods packed ready for sale in cartons or other packages bearing thereon the name of the manufacturer, selling by retail at 10 cents or less per carton,, or to candy known as "gross goods" selling by retail at one cent each.)


James McCrie Douglas: If candy
was shipped by a manufacturer to whole-

sale and storage houses before this regulation went into effect, will it bear the new tax? I have received a letter ifrom a manufacturer of candy in which he makes the statement that he is being put to considerable loss by Teason of the fact that large consignments of candy are exempt from the tax while he as a manufacturer is compelled to charge the tax on all goods which he manufactures and which may go out of his store from now on. Perhaps he is under a misapprehension in this regard and I should like an explanation from the minister.
iSir HENRY DRAYTON: The tax is merely on the manufacturer, and if any retailer has a large amount af stock on hand he is just that much ahead. So far as the manufacturers are concerned, they are all in the same position; and they are also all i,n the same position as regards former sales; they made those sales without having to pay the tax.


James McCrie Douglas: Suppose a manufacturer has two or three carloads of confectionery in Western Canada and ships it for storage to be sold afterwards. Is he exempt in that case?


Henry Lumley Drayton: He would be
taxable because he would be only holding the candy in storage the same as if it were on his premises. He will be taxable on everything that had not been actually delivered on the 19th of May.


Isaac Ellis Pedlow: What about the manufacturer who makes his own candy and sells it over the counter? Will he have to pay the manufacturer's tax in addition to the excise tax?


Henry Lumley Drayton: He will have to pay the tax as a manufacturer, and the excise tax.


Mr. McKENZIE:: We cannot hear anything up here and we should like to know what the amendment is.


William Daum Euler: The answer given by the
minister to the hon. member for 'South Renfrew (Mr. Pedlow) was not quite clear to me and I should like him to say exactly what tax will be paid by the manufacturer who sells his own product over the counter. Does he pay anything more than the one per cent sales tax?


Henry Lumley Drayton: In addition to his ordinary sales tax as a manufacturer, when he becomes a retailer he will have to pay the 10 per cent luxury tax under this clause.

359i3


Mr. SIMPSON:: I would like to know if the tax applies to the manufacturer when he sells his own product to his employees, or-as is the practice with some manufacturers-when he sells to large corporations such as hotel companies and so on. When the manufacturers make such sales will they be liable for the sales tax as the retailers are?


Henry Lumley Drayton: This is a tax on the manufacturer. No matter how much he sells, or whether he sells to a wholesaler, to a large hotel, or anybody else, the whole tax is payable.


Daniel Duncan McKenzie: I wish to bring to the notice of the minister the fact that I do not think molasses -candy, w'hich is manufactured in many stores and placed on sale by them, can be regarded as a luxury. The minister gave us to understand all along that this was a luxury tax; but molasses candy -and similar sweet stuffs manufactured out o-f molasses or sugar-manufactured perhaps in some shop or store, as is the case in my part of the country-certainly cannot be regarded as a luxury. The poor man who on Saturday night wants to gladden the heart of his children by taking home a pound or two of cheap molasses candy is undoubtedly not to be classed with the rich man who purchases his dollar or two-dollar box of candy. I am quite willing that the man who is able to buy such high-priced candy should be taxed; but I am opposed to putting a special tax on a man who must be content with taking a pound or two pounds of -cheap molasses candy home to his children. That is certainly not a luxury; and with such a tax as is proposed that man will not be able to buy this candy at all. If molasses candy is taxed on some other ground I can understand it, but I cannot understand the minister taxing it as a "luxury," and 1 protest against it.


William Foster Cockshutt: May I ask the minister whether maple sugar, maple cream, and other manufactures of maple will come under the heading of "candy and confectionery"?


Henry Lumley Drayton: I take it that all manufactured maple products would be taxed just the same as any other candy, whether it be maple cream, maple buds, chocolate cream, or anything else.


Georges Henri Boivin: Shall the item carry?


Daniel Duncan McKenzie: No, it is not carried. If the minister does not give an answer to a 228i
question put by me in a reasonable matter of this kind he is not going to gain any time by it. I have already -said that the pound or two of molasses candy that a man may bring home to his family is not a luxury; and if this House is assembled for the purpose of taxing the wealthy man in the matter of luxuries, it is operating in a very small way by taxing the little parcel of molasses candy that the labouring man may wish to buy. I submit to the minister that molasses candy is not a luxury; and if he is -following this man to the point of taxing the pound of candy he has in his pocket he is not taxing a luxury but is departing altogether from that idea of a luxury tax. I think it is my privilege and my right to know from the minister why- after fifty-three years of national existence during which time we never thought of taxing molasses candy-it is now proposed to advance that commodity to the position of a luxury and tax it 10 per cent. When, as a member who represents a large class of working people, I ask why these people should suffer from an imposition of this kind the minister complacently remains seated and is apparently beyond making -any reply. I want to tell the minister that he will hear from me on many matters of the kind, and I expect to be treated respectfully.


Henry Lumley Drayton: I hasten to reassure the hon. member that not for a minute did I intend any disrespect toward him. I would like to point out to him that a lot of questions are levelled at me and there was not much opportunity to answer his question when interrogations were coming from so many other quarters. If I have hurt the feelings of the hon. member I desire most humbly to apologize and to assure him how sorry I am.


Daniel Duncan McKenzie: I want no sarcasm from the minister.
Sir HENR1T DRAYTON: I beg my hon. friend's pardon?


Daniel Duncan McKenzie: I want the tax off the candy; I want no sarcasm.
S-ir HENRY DRAYTON: I assure the hon. gentleman that I am giving him no sarcasm. I shall try, I trust, to do my full duty to him just as much as to any other hon. member.


Samuel William Jacobs: You are giving him taffy.


Henry Lumley Drayton: No, nor "molasses pull." The hon. gentleman is entitled to-


Jacques Bureau: Taffy.


Henry Lumley Drayton: No; a fair
answer t-o a fair question. In the first instance I would like to point out to him that this is -a tax upon the manufacturer. He pays the tax just the same as he used to pay the tax , on the molasses he used to make into molasses * candy and kisses. I would further point out to -the hon. member that while it ils perfectly true that no exception is made in the rates, the present scheme of taxation under the amendment which has been submitted practically exempts cheap sweets. After all, what it amounts to is that on a pound of sweets costing, it is said, 40 cents-I do not know exactly what molasses candy costs, but I think my hon. friend is quite right in saying they are cheap, probably they cost only 30 cents- but on >a pound of, say, 30-cent sweets all the manufacturer is called upon to pay is 3 cents.


Mr. SINCLAIR (Guystoorough):: I agree with the views of my hon. friend from North Cape Breton (Mr. McKenzie) that it is not advisable to tax the cheapest kind of candy known as taffy. I would therefore suggest that ,the minister amend the item by adding the words:
Candy and confectionery in excess of 50 cents per pound.
That would leave the cheapest kind of candy free and would tax the candy that may be regarded as a luxury. What does the minister say?


Henry Lumley Drayton: I am afraid not.


[Stage Direction]
Item agreed to.
Chewing gum or substitutes therefor.
Henry Lumley Drayton: A similar question comes up here as in connection with the cheap kinds of sweets. Chewing gum is very largely [DOT] used,-why I personally cannot understand, but it is very popular. The machines used for making chewing gum are wonderful,-they cut the slices and fold the parcels without the intervention of the human hand; and I find that, on the one hand, it is impossible to cut down the size of the package, or, on the other hand, to do anything in respect to this tax, so far as the manufacturer is concerned, except to leave it as it is and thereby very largely increase the price of the gum. I propose therefore, in view of the conditions which, as investigation demonstrates, attach to this chewing gum business, to- reduce the tax to 3 per cent. So that the item will read:

A tax of 3 per cent on chewing gum or substitutes therefor.
I would suggest that those words be placed after the word "namely," making them paragraph (a). I shall have other amendments to move in the same direction, so I will not ask you, Mr. Chairman, to re-letter the 10 per cent line yet.


Rodolphe Lemieux: I do not know why you should toe so considerate about chewing gum. I think gum chewing is one of the most vulgar habits that exists in this country. Recently I read an article, written by a gentleman who had resided for several years in Brazil, describing how the gum was collected -and treated, and he added, "If the people only knew what enters into chewing gum, they would not touch it with a ten-foot pole." However, it is served in restaurants and in candy stores, and our people have copied what is purely an American habit, for in every civilized country of Europe you never see a man, much less a woman, chewing gum.
I have heard that when the "Sammies" were crossing the Atlantic "to win the war" a young lady having asked General Pershing what comforts she should collect for the Sammies, he replied: "For Heaven's sake suppress gum for the soldiers, because they will see the nice French girls, and those girls will probably copy the habit of chewing gum, and then they will change the brightest smile in the world into the most awful grimace." Well, Mr. Chairman, to be serious, I do not know why the duty is reduced on chewing gum. I would increase it fifty per cent.


Samuel William Jacobs: I am not particularly interested in the chewing-gum policy of the Government, but as- a matter of personal information I would like to know what is a "substitute" for chewing gum?


Jacques Bureau: Chewing the rag.


Henry Lumley Drayton: No, I do not
think it could be the sustitute suggested by the hon. gentleman. I believe chicle is supposed to be the real chewing gum, but that other gums apparently work just as well for chewing and are largely used. I do not know that there is anything particularly significant in the word.


[Stage Direction]
Item agreed to.
Firearms, shells or cartridges for use other than for militia purposes.
Samuel William Jacobs: I would suggest that we add after the word " militia " the words "or police."


Henry Lumley Drayton: I do not think my hon. friend is really of opinion that the policeman should do much firing with "firearms, shells or cartridges." I am sure the amount of firing would not be very much, and' I know he is not in sympathy with that kind of policeman.


Samuel William Jacobs: Policemen use firearms
occasionally.


Henry Lumley Drayton: So occasionally that I should not think it worth while to make an exception.


[Stage Direction]
Item agreed to.
Pianos and organs (other than pipe organs) ; musical instruments not otherwise provided for in this resolution.
Henry Lumley Drayton: Mr. Chairman, I am compelled to offer an amendment in connection with that item, to the end that the tax should be lowered on the cheaper hut thoroughly good grades of organs and pianos, which are built very largely for sale to those classes of the community that cannot afford to buy the higher-priced instruments. I propose to move that the tax on pianos not exceeding $450 be reduced to 5 per cent-the effect is to leave the tax on pianos valued at over $450 at 10 per cent and to reduce the tax on pianos not exceeding $450 to 5 per cent-and that the tax on organs not exceeding $150 be reduced to 5 per cent, 10 per cent to be paid on organs costing more than $150. The present exemption in connection with organs is confined to pipe organs, the idea being to exempt church organs. We find, however, that many churches cannot afford to use pipe organs, so it is proposed that the exception read "other than pianos and organs for religious and educational purposes."


Louis Édouard Fernand Rinfret: I would ask the minister to exempt from tax all orchestral and band instruments. The orchestral instrument is not a luxury; nobody would think of buying a trombone or an oboe as an ornament for his parlour. These instruments are necessities to many men who use them in connection with their profession. They are bought in the United States; a very large customs duty is paid on them when they enter Canada, and the rate of exchange adds another ten to thirteen per cent, so that the instruments are brought up to a very high price. They are as necessary to the musician as technical books are to the professional man, and I would ask the minister to exempt them from tax.


Henry Lumley Drayton: In recognition of what the hon. member has pointed out,
we have cut the tax in two. The original provision was ten per cent; now we make it five per cent.


Louis Édouard Fernand Rinfret: I thank the minister for his concession, but I still hold the view that these articles should be exempt from taxation and I ask the committee to have them struck off the list.


Henry Lumley Drayton: The representatives of the interests involved, the players* organizations, were quite content, after the situation had been pointed out to them, to accept the five per cent tax.


William Duff: There is a great deal in what my bon. friend (Mr. Rinfret) says. In Nova -Scotia we have a number of what are called local bands. These bands do not collect fees; the people in the town or country districts help the bandsmen to buy their instruments and arrange to look after them during the year. It does seem to me that in the case of local bands especially there should be no tax upon these instruments.


Joseph Elijah Armstrong: I would like to urge upon the minister, the desirability of not taxing these musical instruments. In almost every town and village in the country you will find a small band organized for the purpose of entertaining the citizens, and it would not be well to place a tax upon the instruments which they use.


Henry Lumley Drayton: Well, the number of brass instruments that are purchased is extremely limited, and under the circumstances I am willing to consent that band instruments be excepted. To that end I move that the words "other than band instruments" be inserted after the words "musical instruments" in the item.


Mr. VERVTLLE:: The people who play in local bands in small villages and towns do not dJo so m order to earn their living, but in large cities like Toronto and Montreal a great many persons earn their living as musicians, playing at theatres, concert halls, etc., during the afternoon or evening. Is it fair to put a tax on the instruments which they use?


William Cameron Edwards: The same argument
might apply to a man who was buying a pair of boots; he finds it necessary to have boots in order to make a living. I do not think there is much in the point raised by the hon. member; it might apply to any of these items. I think that the minister has

been very generous in his consideration of the requests of hon. members on this item.


Alphonse Verville: I admit that you have to wear boots in order to make a living, but musicians also have t)o wear boots. That is not the point at all. If the tools used by mechanics and tradesmen are exempted, there is no reason why musical instruments used by persons who make their living as musicians should not also be exempted.
Mr. McMA-STER: May I say a word in response to the argument advanced by my hon. friend (Mr. Edwards)? There is a distinction to be drawn between boots and musical instruments. Although it is hard to find them, there are boots under $9 upon which no tax has to be paid. The minister has very kindly given way on the question of band instruments; but is it not a little illogical to free the blaring trumpet and to retain the tax upon the flute and the violin?-the latter thought by some to be the finest vehicle of expression of musical composition. The minister, in the desire to further the culture and artistic life of the country, should free from any of these luxury taxes orchestral as twell as band' instruments. The point made by the hon. member for St. James (Mr. Rimfret) and the hon. member for St Denis (Mr. Ver-ville) that orchestral instruments are the tools by -which some men earn their living appears to me to be of the strongest character, and I would respectfully urge upon the minister that logic, common sense and a desire to advance the artistic life of this country should all combine to lead him to agree to free both orchestral and hand instruments-
While I am on my feet I should like to make this suggestion. I think this 5 per cent -which is now placed upon pianos and organs -should apply also to paragraph (c), mechanical piano players, graphophones, phonographs, talking machines, etc., -and the argument that I vfould' bring forward in support of my contention-but perhaps I am anticipating the minister.


Henry Lumley Drayton: I have a suggestion to make in connection with that.


William Stevens Fielding: I thought, as a good Scotchman, the hon. member for Brome (Mr. McMaster) was rising for -another purpose. I want to kpow what the minister is going to do with regard to bagpipes.


Mr. BUTTS:: Any Scotchman knows what to do with them.


Louis Édouard Fernand Rinfret: I wish to thank the minister -for his- action in regard to band instruments, but I would urge that he extend that amendment to orchestral instruments, because the same reason applies to both.


Henry Lumley Drayton: There is quite a distinction between bands on the one side and orchestras on the other. Bands are very largely composed of people who volunteer their services; indeed-, s-ome hon. gentlemen, when they wanted band instruments to be made free, urged that point- that these bands are composed of people who -play for nothing in order to help out their little -municipality or their regiment. On the other hand, as a general -rule, a man working in an orchestra plays both day and night.


[Stage Direction]
Amendment agreed to.
Item, as amended, agreed to.
Gas and electric light wall brackets, in excess of $3 each;
Gas and electric light fixtures, in excess of $3 each, not elsewhere specified.
Henry Lumley Drayton: This comes up in connection with the item of chandeliers which has already been -referred to and which was allowed to stand because changes were going to be made in it. I move:
That the words "Chandeliers except for churches" be struck out of paragraph (b) of resolution 1 and the following be inserted in resolution -3 :
Chandeliers, except for churches, in excess of $12 each;
Wall brackets, in excess of $3 each;
Gas and- electric light fixtures, not elsewhere specified, in excess of $3 each.
That covers the chandelier for the poor man's house, which -hon.. gentlemen were *speaking of at different times in the debate.


William Daum Euler: But $3 is rather a low figure for a wall bracket. I do not believe a wall bracket can be bought for that sum, and I would- suggest that the figure be made somewhat higher.
-Sir HENRY DRAYTON: The hon. gentleman will see that this is a manufacturer's price, and I have no doubt that 50 per cent would be added to that for the retailer.


Samuel Francis Glass: To avoid possible misunderstanding or ambiguity in the clause, I would ask the minister, what is t-he definition of a chandelier. For -instance, an electric fixture that may be suspended from the ceiling with three lights might, under the ordinary definition, be an electric chandelier and exempt up to $12, and yet a wall fixture or other character of fixture would have an exemption of only $3.


Henry Lumley Drayton: As I recollect
the matter, a chandelier is defined as a fixture hanging from the ceiling and having two or more branches. Some people would, I think, say that it should have three lights in order to make it a chandelier; but it seems to me that that was not the important thing about it; that the point was that it was more than a drop light; that it illuminated the room from the ceiling. A chandelier as we use it here is .a fixture for lighting a room from the ceiling as distinguished from a wall bracket.
Mr. 'GLASS: That is just where the incongruity comes in. You have a three-light fixture from the ceiling exempted up to $12, and yet the poor man who wants to put a small bracket on his wall has an exemption of only $3.


Henry Lumley Drayton: As regards the
cheap wall bracket, on going into the matter with manufacturers, I find that one can be got for $1.50. I take it that when the hon. member says "poor man," he means somebody who wants to get a bracket as cheaply as he can. Just as much leeway is given on $3 to the side light as there is on $12 to the centre light. Of course, much more lighting can be got from the centre than from the side; it is more economical to have lighting from the centre.


[Stage Direction]
Item agreed to.
Georges Henri Boivin: Will the minister
please say how the following item has been disposed of?
Pianos and- organs (other than pipe organs) ; musical instruments not otherwise provided for in this resolution.
Sir HENRY DRAYT'ON: It remains with the 10 per cent tax.


Georges Henri Boivin: Will the minister
kindly say how this item should read at the present time?


Henry Lumley Drayton: I would ask the committee to consider in conjunction with this item paragraph (c) of resolution 3, which provides for:
(c) A tax of twenty per cent on,-
Mechanical piano players, graphophones, phonographs, talking machines, music boxes and records used in connection therewith or with any musical instrument.
I propose to move an amendment to that. Much as we would like to get the revenue, the situation seems to. be such that this tax would bring about a hardship to a number of people who have become accustomed to look upon these instruments as part almost of their everyday life. We propose to reduce the tax from 20 to 10 per cent.


Samuel William Jacobs: Is that leaving it just as
it was last year?


Henry Lumley Drayton: Yes, so far as instruments are concerned.


Samuel William Jacobs: And the records too?


Henry Lumley Drayton: It is all the
same as last year. It is practically a reenactment. In other words, there is no increased tax on these articles. I beg to move:
-that the item pianos and organs (other than pipe organs) musical instruments not otherwise provided for in this resolution and paragraph (c) be struck out and the following be susbtituted therefor:
Pianos exceeding $4.50 each and organs exceeding $150 each (other than pianos and organs for religious or educational purposes) Mechanical player pianos, graphophones, phonographs, talking machines, music boxes and records used in connection therewith or with any musical instrument; musical instrument (other than band instruments) not elsewhere specified.


[Stage Direction]
Amendment agreed to.
(b) A tax of fifteen per cent on,-
Automobiles adapted or adaptable for passenger use.
Jacques Bureau: May ll ask the meaning of the words "adapted or adaptable for passenger use"? A small truck, for instance, may be used for business purposes on week days, and on Sundays they may put a board on it and take a ride. Would that car be considered as adaptable for passenger use?


Henry Lumley Drayton: No.


Jacques Bureau: Take another case. Electric, telegraph, and telephone companies have trucks to carry their men around to make repairs in case of trouble. These rigs are more for the purpose of carrying on the business of the company than for carrying passengers, yet they may be regarded as regular passenger cars because they have a seat and a top, and a box in the back to carry the tools. Would they be considered "adaptable for passenger use?"


Henry Lumley Drayton: It would depend in each case upon the particular machine. If it was a machine that any one could take out and use as a passenger machine it would be taxable. If, on the other hand, it was dedicated to a specific purpose by means of its repair equipment and the like, the mere fact that it had a seat and carried workers would not make it a passenger car.


Jacques Bureau: It is practically a passenger car. The tools required for making

repairs are so small that they can he put in a box at the back.


Henry Lumley Drayton: If it was a passenger car it would pay the tax.


Jacques Bureau: It is not used for passengers mainly but to maintain the lines in operation.


Georges Parent: Suppose a company distributing electricity had on one of its cars used for repair purposes the name of the company; would that be regarded as a car adaptable for passenger use?


Henry Lumley Drayton: I am afraid it would have to pay the tax.


William Foster Cockshutt: It seems to me the minister's proposal in this respect is rather an extreme one. Already there is a very heavy tax upon motor cars entering the country and they have to take out licenses in the various provinces. Now it is proposed to add a tax of 15 per cent on a car costing up to $3,000, and 20 per cent, I understand, on cars exceeding that amount. That in all will make upwards of one half the value of the car in taxes alone, and I think it will have a tendency to frustrate the getting of the revenue. It certainly looks to me pretty steep when you make a car pay 55 per cent of its value in taxes. I quite agree with the hon. member for Three Rivers as to the word "adaptable." I do not think it is a good word to use in this connection. Almost any car can be converted into a truck. Ford cars are frequently converted into small trucks for business purposes, and they can be converted back to passenger vehicles with very little trouble. I think the word "adaptable" is not the proper one to express what the minister has in view.


Francis Ramsey Lalor: Does this tax apply to
domestic and imported cars?


Henry Lumley Drayton: Yes.


Francis Ramsey Lalor: I agree with the hon. member for Brantford (Mr. Cockshutt) that we are going to the extreme in taxing motor cars. While they are to a large extent a luxury, they are at the same time a necessity, they are becoming used so commonly now throughout the whole country. There is hardly a farmer in my part of the country that does not own and run a motor car, and the farmer is getting beyond the Ford ear and using a more expensive one. Working men buy motor cars. People save their money and the most of them seem to have the ambition to own a car. It is the

greatest comlfort and luxury any family can have; it is a great comfort to the father and the mother and the children. I really think we are going to the extreme in taxing this class of vehicle.


Henry Lumley Drayton: I really thought that this tax would be considered too low, if anything. I have been receiving any number of complaints because I am not half taxing automobiles. The number of people who own automobiles' is, after all, I suppose, a little less than those who do not own one. I have not one myself, so I cannot look upon the matter perhaps from exactly the same standpoint as my hon. friend. The claim has been seriously put forward by many people that automobiles practically expropriate the highways and they should therefore pay a very heavy tax. The suggestion is being made that we should not only tax them on their purchase price, Which is all that we are doing, but that we should also levy a heavy tax on them per annum, as they do in England. The suggestion has been made that we should levy a tax of $100 on every automobile using the streets. It has been further suggested -that we should have a special tax on very expensive cars. We are not doing these things. So far as the imported car is concerned, the tax to-day on the cheaper car this country requires, for use in the country, has been reduced.


Jacques Bureau: 
Henry Lumley Drayton: 
William Daum Euler: If we are really going to
tax luxuries, I think it will be rather difficult to argue and convince the public that the automobile should not be taxed. It is to a very large extent a luxury. Does the minister propose to tax an automobile that is adapted for passenger use if that car is used for the purposes of business? Take, for example, a car used for transporting people from the station to a hotel, and which is used entirely for business purposes.


Henry Lumley Drayton: That would be taxed.


William Daum Euler: It seems to me that a man who is using his car as a means of getting a living should not be penalized. Such a car is not a luxury and some exception should be made.


Mr. NESBITT:: The only complaint I hear in regard to the automobile is that the tax is not enough. There is a good deal of complaint about taking that 2i per cent off imported cars, and I agree that the tax on the imported car ought to be increased instead of being reduced. There should be some special tax, the same as the provincial governments put on cars, over and above this 15 per cent. This Government should also exact a special tax of, let us say, $10 apiece as well as the 15 per cent. While I quite agree with my hon. friend from Brantford and my hon. friend who sits beside him that a great many people use cars for business purposes and that they are a great convenience to farmers, I do not know that there is any special reason why farmers should be excused from all kinds of taxes any more than the rest of us.


An hon. MEMBER:: We all sympathize with the farmers.


Edward Walter Nesbitt: Yes, .so it seems. I am not complaining about the tax of 15 per cent on automobiles, and, as I said a moment ago, the only complaint I have heard from the public is that it is not enough.


William Stevens Fielding: Is not the minimum of $3,000 rather high? Of course, automobiles are all higher in price now than formerly but the cheaper automobile is no longer a luxury; it is becoming one of the comforts of life and is doing a good deal, I think, to make people more contented with farm life, which is an important fact. I suggest that the minister might make three rates. I agree that all automobiles should be taxed, but $3,000; even to-day, is a high price to pay for an automobile. The Ford car or any car of that character can be bought for less than $3,000.


Edward Walter Nesbitt: Almost everyone wants to buy better cars nowadays. The cheaper car rattles in a couple of days' time.


William Stevens Fielding: I am not retained by the Ford Company to advertise them, but I saw the statement the other day that about one-half of the cars in America are Ford cars. Evidently they must have some virtue or so many people would not use them.


Jacques Bureau: The best car for the money.


William Stevens Fielding: Cases have come under my personal observation where .farm life has been very much improved and young people have been made content to stay on the farms by having automobiles that enable them to run into town fifteen or twenty miles away and do business and return. The automobile is no longer a luxury so far as the cheaper cars are concerned. The higher-priced cars are luxuries, and I would ask the minister to consider whether he might not reduce the minimum to meet the case of the Ford and similar cars.


Peter McGibbon: I think that cars of any description .are a luxury, and I see no reason why we should differentiate between different makes. Any man who can afford to. run a Ford car and pay 50 cents a gallon for gasoline can afford to pay something towards the upkeep of the country, and I agree with the hon. member for North Oxford (Mr. Nesbitt) that if there is any complaint in regard, to cars it is that the tax is too. light. I say that taxes .should be lifted from the workingman and the poor man, and- the man who can afford such a luxury as a car should be compelled to pay for it. I would suggest to the minister a graduated scale; there should be one per cent for every hundred dollars valuation of the car over a certain sum. I think that at a time when exchange is against us to the extent it is to-day people ought to be content to use Canadian-made cars, and if they want to import cars from the United States costing $2,000, $3,000 or $4,000, they should contribute handsomely towards the upkeep of the country.


[Stage Direction]
Resolution agreed to.
A tax on playing cards for every fifty-four cards or fraction of fifty-four in each package; when selling at $25 or less per gross packages, twenty-five cents per pack; when selling In excess of $25 per gross package, fifty cents per pack.
-Sir HENRY DRAYTON:	I propose to
mo-Ve an amendment to this resolution. There are very much cheaper cards than those contemplated when this resolution was drawn up. There are cards that sell wholesale at as low as $12 and1 less a .gross, and I therefore move:
That all of the words after the word "package" in paragraph (d) he struck out and the following substituted therefor:
When selling at $24.00 or less per gross packages, fifteen cents per pack;
When selling in excess of $24 per gross packages but not in excess of $36 per gross packages. twenty-five cents per pack;
When selling in excess of $36 per gross packages, fifty cents per pack.
Georges Parent: I presume that fifty-four cards would include what we call the

"joker" and the white card, which are not used when you play poker. I (believe that with a view to evading the law some manufacturers are putting only fifty-two cards into the pack now, omitting the two I have mentioned.


Henry Lumley Drayton: The hon. member will see that the resolution provides for fifty-four cards "or fraction of fifty-four" in each package. Anything less than fifty-four is a fraction of the whole.


Samuel William Jacobs: Will the minister tell us what the tax was before, so that we may see what change is being made?


Henry Lumley Drayton: The former tax was 8 cents.


Samuel William Jacobs: I fear that if we persist in imposing a tax of this kind we shall drive the community into shooting craps, or shaking dice, or going on the stock exchange.


Henry Lumley Drayton: People will find all these things very much more expensive. After all, I do not know that there is anything that can better afford to pay a tax than cards, which provide a good source of revenue to France. She charges 2 francs flat on all cards.


Samuel William Jacobs: A franc is only worth
about twelve or thirteen cents.


Henry Lumley Drayton: It is worth just as much to the Frenchman at home as our money is to us.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
(e) A tax of thirty per cent on,-
Patent and proprietary medicines including medicinal or medicated wines, vermouth and ginger wine containing not more than forty per cent of proof spirits.
Louis Édouard Fernand Rinfret: I understood the other
day that the minister was going to reduce the tax proposed under this item?


Henry Lumley Drayton: A reduction is proposed in connection witn the tax. This tax runs from one commodity pretty well to another in connection with patent medicines. Perhaps I should read the whole of the resolution in connection with patent medicines, and kindred taxes, because this tax of thirty per cent in a sense, runs pretty well into the tax reserved by subsection (f) which deals, of course, more with the manufactured rather than the imported article, while this particular section, as I understand it, deals with the imported article. I move:
That paragraphs (e), (f), (g), (h) and (i) of resolution 3 be struck out and the following substituted therefor: fMr. Parent.]
"A tax of two dollars per gallon,-
"On rum, whiskey, brandy, gin, wines containing more than forty per cent proof spirits, cordials, liqueurs and spirituous and alcoholic liquors not otherwise provided for in this resolution suitable for beverage purposes (not Including alcohol used in the process of manufacturing articles of commerce in which the alcohol is destroyed and from the resultant products of which it eannt be recovered)
"A tax of thirty cents per gallon,-
"On ale, beer, porter and stout;
"On wines of all kinds, except sparkling wines, containing not more than forty per cent of proof spirits.
"A tax of three dollars per gallon,-
"'On )Ch,am|pagne and all other eparkliig wines.
"That the excise taxes as imposed by the preceding resolution shall be payable on the duty paid value in addition to the present duties of excise and customs at the time of sale by the Canadian manufacturer or when imported or when taken out of customs or excise bond, but shall not apply to such articles when exported, and shall be accounted for to His Majesty in accordance with such regulations as may be prescribed.
"That the following excise taxes he imposed, levied and collected, at the time of importation or when taken out of customs warehouse for consumption, on the duty paid value of the articles hereinafter specified, namely:- "A tax of twenty per cent,-
"On medicinal or medicated wines, vermouth and ginger wines, and patent and proprietary medicines containing alcohol but not more than forty per cent of proof spirit.
"A tax of two dollars per gallon,-
"On lime juice or fruit juices, fortified with or containing more than twenty-five per cent of proof spirits ;
"On spirits and strong waters of any kind, mixed with any ingredient or ingredients, as being or known or designated as anodynes, elixirs, essences, extracts, lotions, tinctures or medicines, or ethereal and spirituous fruit essences, not otherwise provided for in this resolution ;
"On alcoholic perfumes and perfumed spirits, bay rum, cologne and lavender waters, hair, tooth and skin washes, and other toilet preparations containing spirits of any kind.
"A tax of fifty cents per gallon,-
"On lime juice and fruit juices, fortified with or containing not more than twenty-five per cent of proof spirits not otherwise provided for in this resolution."


William Stevens Fielding: How will that leave
patent medicines?


Henry Lumley Drayton: There is a direct reduction from 30 to 20 per cent.


Joseph Elijah Armstrong: How is
the tax to be collected? Direct from the retailer, or from the manufacturer?


Henry Lumley Drayton: It is to be collected at the time of importation, or from the manufacturer.


The CHAIRMAN (Mr. Steele):: Has the minister any amendment to offer in place of (e)? That is not included in this amendment.


Henry Lumley Drayton: It is in the
later part of the amendment. You will see a tax of 30 per cent is levied on patent and proprietary medicines including medicinal or medicated wines. That is taken in in the resolution which I have just read under the caption of " A tax of twenty per cent."


Louis Édouard Fernand Rinfret: If I understand the
amendment well, there is a reduction from 30 (to 20 per cent on patent medicines. I appreciate the reduction, but I contend, Mr. Chairman, that that tax should be removed altogether. During the Budget debate I quoted the comments of the Ottawa Journal on this matter. I may say that when the minister announced that he was going to reduce the tax from 30 to 20 per cent 'the Journal went on and said that in its opinion the tax was still too high and gave very good reasons for it. It contended that it is the sick who are to be taxed, and especially the poorer people who are sick. It further said that patent medicines are often the poor man's substitute for profes-ional medical attention. I think the point made by that paper is very well taken. I will state further that this tax is imposed on the poor people when they are less able to pay it, because when they are sick their earnings are either impaired or they do not receive any at all by reason of the fact that they cannot work. The minister is taking off taxes from food. I contend, Mr. Chairman, that medicine is properly the food of the sick people and it should not be taxed at all. The alcohol that is contained in patent medicines is not a beverage, it is merely a preservative. If these medicines are found on analysis to contain more alcohol than is necessary to preserve their contents they are discarded, or if they do not contain sufficient medicinal elements they are discarded. So it is quite plain that a patent medicine cannot he described as a beverage; it is merely a food for sick people. I would ask the minister-when he comes in-to remove that tax altogether. There is no doubt the Government will lose a little revenue but that loss will accrue to the advantage of the hospitals and sick people and, I think, will not be out of place.


Mr. STEWART (Lanark):: As I understand the amendment, it makes this change in the resolution as originally introduced, that the manufacturer of a medicinal preparation is obliged to pay the increased tax of $2 per proof gallon upon the alcohol that enters into the manufactured product. That means a duty of $3.30 a gallon for absolute alcohol. The tax of 30 per cent
on patent medicine, or the reduced rate of 20 per cent, is a customs tax which will operate as a countervailing tax to protect the domestic manufacturer against imported remedies manufactured in the United States or any other country and not subject to the additional tax upon alcohol. The same would apply to the $2 per gallon flat tax which is afterwards provided for in the resolution, and which will apply as a customs tax upon imported medicinal preparations that do not come under the classification of patent or proprietary medicines, and upon perfumes and toilet preparations containing alcohol. In both cases the tax applies only to those preparations containing alcohol.
The position under the proposed amendment is that there is no tax upon medicinal preparations containing alcohol manufactured in Canada, aside from the tax of $2 per proof gallon, which amounts to $3.30 a gallon upon the alcohol which enters into the manufacture. I might say that the tax of $2 per proof gallon, or $3.30 a gallon upon the alcohol which enters into the product, is a' very severe charge in itself, and it is in order to protect the domestic manufacturer that the tax upon patent medicines and the flat tax of $2 per gallon is put on as a customs tax or countervailing charge. In no case is there a tax upon a proprietary or patent medicine or medicinal preparation of any kind that does not contain alcohol.
In addition there is a tax exemption on alcohol where it enters into the manufacture of preparations from which it cannot be recovered. Under our Inland Revenue law to-day there is power by Order in Council-which has been exercised for years-to reduce the tax of $2.40 per proof gallon to 15 cents. Take the alcohol, for instance, used in the manufacture of Sal-varsan. A large amount o.f alcohol is required for crystallization, in the manufacture of that remedy, and the alcohol so used comes in under a tax of 15 cents. There is quite a range of other preparations, such as chloroform, etc., where the alcohol used is lost in the process o.f manufacture. Under this amendment, as I understand it, where alcohol is used in the manufacture of these preparations-and, as I say, there are quite a number of them-


Jacques Bureau: Would ether be included in that?


John Alexander Stewart: Yes. Where the alcohol is used and lost it is not subject
to the tax. The necessity for that exemption

will be present to the minds of the committee when we consider that under the law as it has existed for years provision has been made in order that the Canadian manufacturer might be in a position to compete with the foreign manufacturers of these products. The same thing applies to perfume. Alcohol, which costs the manufacturers of almost all other products except thiose I have mentioned an inland revenue tax of $2.40, is passed for these manufacturers at a tax of 75 cents. Alcohol used in the manufacture of soap-and quite a lot is used-now comes in at 15 cents instead of $2.40.
Therefore the tax now imposed upon the manufacturer of medicinal preparations will be limited to the tax of $2 per proof gallon on alcohol. In the past the manufacturer of medicinal preparations has been forced to pay the same tax as if the alcohol were used for beverage purposes. The underlying reason is that it would be a comparatively easy matter to regulate the alcohol which enters into the manufacture of medicinal preparations where those preparations are manufactured by a pharmaceutical manufacturer, but the difficulty would be to control alcohol, suitable for beverage purposes, where it goes out into the hands of 3,300 retail druggists; and it would be manifestly unfair that those druggists should be obliged to pay the full alcohol tax-which at present is $3.95 per gallon-and in addition $3.30, or a total tax on alcohol after this .amendment is passed of $7.25-the pharmaceutical manufacturer should be relieved from the additional $3.30 tax. It has been because of the difficulty of controlling alcohol where it passes into the hands of so many retail druggists that it has been thought wise that the manufacturer of pharmaceutical preparations should be placed in precisely the same 'position as the retail druggist. Under this amendment it seems to me that the manufacturer of pharmaceutical preparations, the dealer in them, and the people who use them, are protected as far as possible if the additional tax of $2 is to go upon ethyl alcohol.


Mr. TWUEDIE:: A large quantity of alcohol is used in flavouring extracts; what about them?


John Alexander Stewart: they are in precisely the same position as medicinal preparations under this amendment. They now pay $2.40 a gallon upon the proof strength of alcohol, in other words $3.95 per measured gallon of alcohol; they will

now pay an additional $2, or $3.30 per measured gallon of alcohol, which will be a total tax of $7.25. There is no other tax under the resolution against these products.


William Stevens Fielding: The hon. member for Lanark (Mr. Stewart) stated, if I am not mistaken, that there is no tax on patent medicines not containing alcohol. The amendment may make that clear, but I do not think the original resolution does, and I call the minister's attention to them.
Patent and proprietary medicines including; medicinal or medicated wines, vermouth and ginger wine containing not more than forty per cent of proof spirit.
It dtoes not follow that they must contain some proof spirit. I think it is not over clear, and if it is intended to be what the hon. member states I think he can find general language to place that beyond doubt.


Henry Lumley Drayton: It is just as
well to make it clear that there is no additional tax on proprietary and patent medicines as such; that any further tax is merely the result of increase of tax on proof spirits. Therefore I suggest that after the word "containing the words "alcohol but" be inserted, so that the item will read:
On medicinal or medicated wines, vermouth and ginger wines and patent and proprietary medicines containing alcohol but not more than forty per cent of proof spirits.


Peter McGibbon: I do not
see why the poor man who requires a drug that needs alcohol to dissolve it should pay a tax because he has to take that drug to get well. Alcohol is sometimes required in OTder that a drug may be made soluble and capable of being administered to the human system. In that case the alcohol is not a beverage; it is simply a vehicle for the conveyance of certain drugs to the alimentary tract in such a manner that they can be assimilated and, may possibly assist in curing a disease. 1 do not see why proprietary medicines containing alcohol should be taxed any more than those which do not. I make no request concerning patent medicines, perfume, or anything of that kind, but I; do ask the minister to be generous and to cut out this provision with regard to proprietary medicines.


Henry Lumley Drayton: It is not a matter of what one would like to do; it is a matter of the desirability of having different rates of taxation upon alcohol in different forms. If the hon. member could show us how to overcome the difficulty I should be glad to consider the matter. But there are a large number of places where these

medicines are put up, and it would be impossible to police them. We cannot very-well increase the rate on alcoholic beverages without increasing the rate on medicines in' which alcohol is used.
Mr. BElLAND:	I share the view of my
hon. friendi from Muskoka (Mr. McGibbon) that patent medicines should not be too heavily taxed. They are bought largely by people who live in the country, particularly those who live a long distance from a physician; in many such cases they serve a goodi purpose. It would be a hardship to impose a heavy tax upon a patent medicine on the ground that it contains alcohol.


Henry Lumley Drayton: I suppose my
hon. friend 'knows of that wonderful beverage known as "Tanlac," which is so widely advertised and which is supposed to make such a first-rate cock-tail, and of "IBeef, Iron and Wine," which is often taken ad lib. There are many others of the kind.


Henri Sévérin Béland: I am not familiar with
the composition of "Tanlac," but none of these drugs can be sold unless their sale is authorized by the board constituted under a statute passed by this House at the last session.


John Alexander Stewart: I certainly
agree that there is no logical reason why the alcohol that enters into the manufacture of a medicinal preparation should be subject to a tax any more than any other of the medicinal ingredients should. We have provided that in the case of patent medicines a board composed of eminent .members of the medical profession shall pass upon the sufficiency of the medication. It has been found necessary to a'dd to the cost of medicines every increase that occurs in the tax upon alcohol for beverage purposes. There is a real objection to this, for the reason that the tax on patent and [DOT]proprietary medicines, and even on medicines that are dispensed on a doctor's prescription, comes out of people who actually require the medicine; and it seems to me that, as a matter of cold reasoning and logic, it would be far more reasonable to tax a man's oatmeal when he is in health and working and earning money than to tax his medicine when he is laid aside and his earning power has gone. The difficulty has always been to work the matter out in such a way as would permit the Government to control the alcohol. I can see quite plainly where it would be possible to control the alcohol that is used by a large pharmaceutical manufacturer in such a way as to protect the Government against
the improper use of alcohol for beverage purposes. But the difficulty that arises is in treating equitably all those engaged in dispensing medicinal preparations. It would be absolutely impossible to control the handling of alcohol in the hands of 3,300 retail druggists. The reason it would be easy to control a manufacturer is that every manufacturer -to-day manufactures in bond for export, because on his export trade he gets a rebate on the alcohol that enters into his product. The fact that he is so equipped, and that his premises are so laid out that he can manufacture under inland revenue supervision and that his products can be sent aside in bonded warehouses, enables the Government to keep an actual control upon the whole process of manufacture, and they are able to determine to a certainty the quantity of alcohol that enters into the manufacture of any particular product. But it is impossible to do that with the retail trade, and the difficulty that would arise in making any further concession here would be that you would be discriminating in favour of the large manufacturer as against the smaller manufacturer and the retail druggist who are not equipped to take advantage of any provision that might be made to relieve them of the alcohol tax.


Mr. DAVIS:: I speak subject to correction because I have not heard the resolution very well; but one matter that was brought to my attention by a committee of the University of Manitoba was the use of ethyl alcohol in hospitals for bathing fever patients to prevent bed-sores, and for rubbing and such like. Is it possible to allow that to come in free of this $2 tax? I can, of course, see the difficulty of controlling the matter, but I should like to have the point considered by the committee.


Henry Lumley Drayton: I do not know that that could be covered in the present Bill. If anything were to be done in that direction-and I quite sympathize with the object the hon. member has in view-it seems to me it ought to be done by way of remission under the Audit Act, when it was shown that the spirit had been employed for the purposes indicated-direct hospital use.


Andrew Ross McMaster: How will 'these changes work out? Perhaps I can be most clear by giving a specific instance. Let us suppose that a manufacturer has invoiced, say on 3rd June, a certain parcel of patent medicine and has charged 30 per cent on this parcel. A change is being made. Suppos-

ing the customer has paid on the basis of 30 per cent. Will the customer have a. right to ask the manufacturer or wholesaler to return to him 10 per cent?


Henry Lumley Drayton: The hon. gentleman is bringing up the question of refund. When the whole matter is reviewed, it will be found that the most practical thing to do will be not to trouble about refunds. In the vast majority of cases, you can never tell whom the refund is going to, and, further, in the larger number of transactions, the amount, as a matter of fact, is not at, all serious.


Andrew Ross McMaster: Supposing a customer has declined to pay the 30 per cent. Would the manufacturer be complying with the law if he were satisfied to take 20 per cent now on the face of his invoice?


Henry Lumley Drayton: That is a point I have not considered, but offhand I *should say: "No."


Fred Langdon Davis: Before the matter that I have raised is disposed of, may I ask the minister whether a statute now exists that allows of a refund in such a case as I have mentioned?


Henry Lumley Drayton: Section 92 of the Audit Act would cover it.


Joseph Elijah Armstrong: Would the hon. member for Lanark (Mr. Stewart) be good enough to give an estimate as to the increased cost to the retailer of certain patent medicines which contain a small quantity of alcohol? Would the increased cost amount to anything worth speaking of?


John Alexander Stewart: If you take pharmacopoeia preparations-for instance, Friars' Balsam under the British Pharmacopoeia strength, this would represent an increase of fifteen per cent; iodine would advance about one-third; opium, about the same percentage. On some preparations the difference would run as much as 50 per cent. '


Joseph Elijah Armstrong: Fifty per cent of an increase in the price?


Henry Lumley Drayton: In ordinary
medicines, the difference runs to something much less than that.


John Alexander Stewart: In a large number of pharmacopoeia preparations, the quantity of alcohol is large. The difference depends altogether on the percentage of alcohol. In proprietary preparations where the percentage of alcohol is small-and notwithstanding popular opinion in that con-

nection, in most proprietary medicines the percentage of alcohol is not high-there will be very little difference in the cost, for the reason, that undoubtedly a considerable proportion of the increased tax will be absorbed by the manufacturers.


Robert James Manion: As a medical man, may I say a word in support of the remarks of my hon. friend (Mr. Davis) and urge upon the minister the necessity of working out that section of the Act so that hospitals shall get a rebate on alcohol which they necessarily use in their duties towards patients? Everybody knows that practically aR general hospitals in this country are losing money in the care of patients, and it would be a pity if such hospitals should be put to greater disadvantage by having to pay excessive prices for this alcohol.


Samuel William Jacobs: The hon. gentleman seems to . argue on the assumption that every person in a hospital is unable to pay the charges. I would be quite willing to agree to a proposition whereby the sick poor would be relieved from this obligation, but why should not people who can afford to pay, pay?


Robert James Manion: I am not arguing on that assumption at all. I made the remark that everybody knows that the general hospitals in this country are all losing money. My hon. friend is right in saying that it is not the private patients that cause a hospital to lose money; but the money which the hospitals get from private patients does not compensate them for what they lose on the public patients. So my hon. friend's argument does not affect the point I made.


Mr. MACKENZIE KING:: Am I right in understanding that so far as these taxes are concerned they will be collected only from impoiters and manufacturers? What about the stock in trade? There is no taxation on that?


Henry Lumley Drayton: No, that is free from the tax.


Georges Parent: There is a point in connection with paragraph (g) that I should like made clear. Paragraph (g) provides for a tax of 30 cents per gallon on ale, beer, porter and stout. I understand that beer is used in the manufacture of vinegar, and that certain brewers have been charged with this tax on beer that was going to be converted into vinegar. I referred the case to the minister and his interpretation was that the tax of 30 cents per gallon did not apply in such a case. As there is a doubt as to the resolution as now drafted, would

the minister have any objection to adding after the word "stout" the words "for beverage purposes?"


Henry Lumley Drayton: I do not think there will be any difficulty over this. This is a tax on what the manufacturer sells. He is not liable-and the department has already so ruled-to pay any tax on beer which is only used for the purpose of making vinegar.


Samuel William Jacobs: I wish to voice my very
strong objection to this tax of 30 cents a gallon on beer. As I had occasion to remark when speaking on the Budget, it seems outrageous that we should tax the beverage of the workingman 30 cents per gallon. I notice that there is bracketed with ale and beer, wines of all kinds, that is to say, all will be taxed 30 cents per gallon. As I have already said, previous to this tax the cost of beer to the workingman was about 30 cents per gallon. With this tax of 30 cents per gallon added, the price of his beer will be raised from 5 to 10 cents a glass. In other words, you are increasing the cost of the beverage of the poor man 100 per cent. It is not the same in the case of wines, which usually retail at about $3, $4 or $5 a gallon. A tax of 30 cents a gallon on wine is only a very small fraction of the cost, and wine is mostly partaken of by other than the poorer class. Why the poor man should have his beverage increased by 100 per cent, while the rich man's beverage should be increased only 10 or 12 per cent, passes my understanding. I have no doubt the minister will be able to give the House some explanation.


Henry Lumley Drayton: This is a matr ter that we discussed on a former occasion in the House and I do not know that anything has since transpired to make me change the opinion which I reluctantly had to come to, and which did not agree with that of my hon. friend. After all, there are lots of compensations in connection with these taxes.


Samuel William Jacobs: What are they?


Henry Lumley Drayton: It is also to be pointed out that this tax does not apply to the kind of beverage that I have no doubt my hon. friend was thinking of- near-beer, or 2 per cent.


Samuel William Jacobs: We have something
stronger than near-beer in the province of Quebec. This is another blow at our province.	!


Louis Édouard Fernand Rinfret: I wish to endorse what
my hon. friend (Mr. Jacobs) has said. I think that, instead of imposing a flat rate of 30 cents per gallon, the minister should have taxed these beverages on a percentage basis. To tax beer and wine at the same flat rate seems to me to be wrong. The tax should be on a percentage basis.


Henry Lumley Drayton: I would point out that the old rates were specific rates. What we have done is practically to double all the rates on liquors. We have doubled the rate on champagne and other wines, as well as on beer.


Samuel William Jacobs: No. Before this tax the cost of beer to the workingman was 30 cents per gallon, and with this tax the cost will be just double, whereas the cost of wines is increased by this tax only from 8 to 12 per cent. I am sorry there was no delegation from the workingmen from the province of Quebec to wait on the minister. I notice that in all the other cases where delegations called upon him and made him see that he was quite wrong in many of his conclusions, relief was obtained, but there was nobody to look after the interests of the workingman, and he now finds his beer advanced in price by 100 per cent.


Henry Lumley Drayton: This workingman argument is often used when it should not be used. There has been a great deal said about beer, and it was said by gentlemen who could not be classed as workingmen. It was said by quite a number of brewers, and their representations were entitled to every consideration. Their arguments were very good. Their arguments were not directed to their dividends, but were entirely made for the workingmen. So far, the only workingmen that have said a word about this 30 cents a gallon tax on beer are those who are engaged in its manufacture, and my hon. friend (Mr. Jacobs), assisted so ably by my hon. friend (Mr. Rinfret). Apparently the workingmen are not worrying very much about it.


Samuel William Jacobs: Might I point out to the minister that the American Federation of Labour are strongly against the prohibition policy in the United States and elsewhere. They feel that prohibition as applied in the United States and elsewhere, is the chief cause of unrest among the workingmen to-day.


Henry Lumley Drayton: I have no doubt that Mr. Gompers would be delighted to be able to get beer even with this tax on it. It was not the tax that he was talking

about, but that he could not get any beer for his men.


John Alexander Stewart: I beg to move in amendment to the amendment that there should be inserted after the word "imported" in the fifth line of resolution No. 4 the words "or when taken out of customs or excise bond."


Henry Lumley Drayton: There is no objection to that.
Amendment to amendment agreed to.


[Stage Direction]
Amendment agreed to.
Resolution agreed to.
Henry Lumley Drayton: I move that resolution 4 be struck out. It is incorporated in resolution 3.
Motion agreed to; resolution 4 struck out.
5. That every person selling or dealing in the articles upon which taxes are imposed as prescribed by the foregoing resolutions may be required by the minister to take out an annual license therefor, for which license a fee not exceeding $2 shall be paid.


William Foster Cockshutt: In the debate that
took place on the Budget it was stated that this license might be revoked or cancelled if it were found that the dealer had violated any of the provisions of the Taxation Act in any respect whatever. I am not sure whether that statement is contained in the minister's speech, but I heard it from some one, and it appears' to me that this question might arise. If this power were used in any arbitrary way a merchant employing perhaps four or five hundred clerks might suddenly find himself held up on his license and entirely precluded from doing business by the fact that some one unknown to himself had made an error in not collecting a certain tax imposed among these hundreds of items embraced in these various resolutions. It seems to me that that is a question that should receive very careful consideration, and no arbitrary power should be exercised in any way in this respect. It is all right to require a license of $2, and between one hundred thousand and two hundred thousand merchants will have to pay the fee. The resolution says that those who come uner this provision "may be required" to take out an annual license; I presume the minister means "shall be required." I cannot see why the word "may" is used; I suppose we can take it for granted that the minister will exact $2 from them. I submit to the minister that it would be rather a high-handed piece of

business to hold the merchant absolutely responsible all the time for all the transactions that are made by his entire staff throughout his shop or warehouse. It is a very large order in many cases, and men with the hest intentions will make mistakes and be subject to lapses of memory. I have known, in. the operation of the drug tax, cases where individuals have been fined $50 for the mistakes of clerks. These mistakes were not intentional, but the penalty was exacted in many cases, and I know of a few such cases in my own riding. Perhaps a small penalty might be provided. But to hold it over the head of the merchant or other vendor that if he does not live up to all the requirements of his license with regard to the hundreds of taxes we are enacting, then his license may be cancelled, is a very dangerous matter. It does not say in this particular section that this will be done, but I have heard that argument put forth; and it seems to me that the minister should so provide that a man will not be put out of business because he has been the innocent victim of a mistake or a piece of forgetfulness on the part of some of his staff. He cannot possibly exercise supervision over all their actions, and it would certainly be unjustifiable to put a man out of business if he did not comply with all the details of the Act.


Isaac Ellis Pedlow: This paragraph reads:
" Every person selling or dealing in the articles upon which taxes are imposed as prescribed." That means every clerk in the employ of a store. The clerk would be the " person selling," and I do not think that it is the intention of the department that he should be required to obtain a license. I suggest that the word "person " be struck out and the words" merchant or firm " be substituted.


William Stewart Loggie: " Proprietor " might be
better.


Henry Lumley Drayton: A clerk in a
store is not " selling " in the sense intended in this paragraph. The person who is meant is the person selling on his own account; the clerk is merely acting as the servant of his master and will certainly not be asked to take out a license. But we want to have the section apply to persons who are not merchants, such as pedlars, for example. These people go around with packs on their backs and are neither merchants nor corporations; yet they sell and deal. We want to cover every one selling or dealing in these articles on his own account.


Isaac Ellis Pedlow: That, I have no doubt,
is the intention of the department, but it is not clearly expressed.


Henry Lumley Drayton: We shall undertake to see that there is no misunderstanding.


William Foster Cockshutt: Will the minister
please answer my question? Is it intend-el that the license shall be revoked or cancelled, or even suspended for a time, in case it is not fully complied with?


Henry Lumley Drayton: I can assure
the hon. member that we have no intention to try to enforce this Act vexatiously. We must, however, have some way of properly enforcing it. We have to have some way of handling, and handling effectively, the dishonest man who will not pay. For example, suppose a man collects taxes and puts them into his pocket:	he is a man
that requires firm and quick handling. But there is no thought of using that power harshly. It would be absolutely wrong to lo so, and more than that, it would be extremely foolish, for thereby the whole object of the Act would be defeated. On the other hand, it seems to me that the power shoull rest in the minister to see that firms do take reasonable precautions to ensure that the public revenue is protected.


Isaac Ellis Pedlow: Where does that penalty clause come in?


Henry Lumley Drayton: That will appear in the Bill.


Andrew Ross McMaster: I presume that in section 5 the words " foregoing resolution " apply not only to the resolutions which are contained in paragraph 3, subparagraphs (a), (b), (c), (d), etc., but to the preceding resolutions. I raise this point because the French translation uses the singular instead of the plural anl this might lead one to a contrary conclusion.


William Lyon Mackenzie King: Am I right in gathering from the minister's remarks that it is really not his intention to ask every retail merchant to pay a fine of $2, but rather that his desire is to have the right to control certain cases where he thinks it is wise?


Henry Lumley Drayton: The hon. member will see that the section says "it may be required." This is one thing that business men seem to have taken to kindly, for any number of them, without being asked, have sent in applications for the license, along with the $2.


William Lyon Mackenzie King: No doubly they felt that they (were hound to have the license.


William Stewart Loggie: Would the minister not
consider making that $1? The merchants are doing this work gratuitously for the Government and if $1 would serve the purpose it seems to me it would be just as well as to ask for $2.


[Stage Direction]
Item agreed to.
6. That the provisions of the said foregoing Resolution shall be deemed to have come into force on the 19th day of May, 1920, and to have applied to all goods mentioned therein imported or taken out of warehouse for consumption on and after that day, and to have also applied to goods previously imported for which no entry for consumption was made before that day.
Henry Lumley Drayton: I think consideration of that clause ought to stand until the Bill is down. I understand that to be the usual custom.


William Stevens Fielding: If you want to get the clause into the Bill you will have to pass it here.


Henry Lumley Drayton: My hon. friend is quite right, it should be dealt with now.
Mr. MdMASTER:	Has the minister any
remarks to offer, in connection with this clause, as to when the changes that we are deciding upon to-night will come into effect? From an answer which he gave me a few moments ago I gathered that these changes would not have a retroactive effect but would come into operation now, and therefore I think he will have to change the wording of this resolution.


Henry Lumley Drayton: I think my
hon. friend is right, but it would be merely changed so as to provide a separate date for the amendments, and the amendments do not become operative, I think, until the Bill is introduced. As I understand it, we cannot fix the dates when amendments will become operative until the Bill is introduced. I may be wrong but I am informed that is the practice.


Andrew Ross McMaster: May I be pardoned if I ask this:	I think the minister should
make a very definite and authoritative statement on this matter so that the business world of 'Canada should know, first of all whether they are to make refunds in view of the changes made to-night,-because demands for refunds will certainly be made; and secondly they should be advised very definitely that what was done on the 19th of May, when the resolutions were intro-



duc^fi, stands either until to-night or until the Bill is introduced.


Henry Lumley Drayton: It will stand
until the Bill is introduced. At present there are certainly to be no refunds; everything goes on as when the resolutions were brought down. We are changing nothing which goes into effect until the Bill is introduced.


Donald Nicholson: Is that
going to be long? Because there will be very great confusion throughout the business world in connection with the commercial situation as it is now?


Henry Lumley Drayton: I think not.


William Stewart Loggie: I would like to draw the
minister's attention to this fact also. It has been contemplated that refunds may be made to the merchants, but I think it will be found impracticable, or almost impossible, to have the refunds made to the consuming public It would therefore seem to me that it might be fair, and in the interest of all concerned, not to make the provision retroactive-that is to say, that those amounts that have already been paid into the Treasury had better stand. Otherwise the merchants will be making a profit and the consuming public would not be able to get it back. At least it strikes me that way from what I know of the business, and of how this tax is collected, and what record there will be of it.


[Stage Direction]
Resolution agreed to.
Isaac Ellis Pedlow: Do I understand that the resolution has been carried as it appears on the record?


Michael Steele: It has
been carried.


Isaac Ellis Pedlow: That is an impossible
condition to impose on the country. The resolution we have been passing this afternoon and to-night cannot be applied back to the 19th of May.


Henry Lumley Drayton: I think we made that pretty clear. What is being settled now is only to keep ourselves in form. Nothing we have done is going to change the liability of merchants, or anybody else, to pay taxes. Everything stands as it is until the enabling Bill is brought down.
(a) That a tax of one per cent In addition to the present duties of excise and customs be imposed, levied and collected on sales by manufacturers, wholesalers, or on importations; that the purchaser shall be furnished with a written invoice of any sale, which invoice shall state separately the amount of such tax, when

not included in the purchase price; that such tax must not be included in the manufacturer's or wholesaler's costs on which profit is calculated ; and the tax shall be paid by the purchaser to the wholesaler or manufacturer at the time of such sale, and by the wholesaler or manufacturer to His Majesty in accordance with such regulations as may be prescribed, and such wholesaler or manufacturer shall be liable to a penalty not exceeding $500, if such payments are not made, and in addition shall be liable to a penalty equal to double the amount of the excise duties unpaid.
A good many references have been made to this turn-over tax having particular regard to lines of business in which some manufacturers and producers sell direct in some instances, and in others where they sell to wholesalers. A good many complaints have been made, particularly from the West in connection with the lumber business where one firm, perhaps two firms, that are manufacturing lumber, sell direct to the public-having sub-stations at different towns apart from their headquarters-and do not sell to wholesalers, while in the great majority of cases the sale is to the wholesalers. The wholesalers object, as also do the smaller manufacturers to this tax entirely because they say it is placing the man who sells direct to the public and not to the wholesaler in a position of advantage to the extent of 1 per cent. I propose an amendment in connection with this so as to provide that when manufacturers sell direct to the consumers, the manufacturer in that case shall pay 2 per cent instead of the 1 per cent; and that whenever the importation is direct for the purposes of consumption there again the tax shall be 2 per cent, making both arrangements even.
The amendment therefore reads:
In addition to the present duty of excise and customs a tax of one per cent shall be imposed, levied and collected on sales and deliveries by manufacturers wholesalers, or jobbers and on the duty paid value of importations; that in respect of sales by manufacturers to retailers or consumers, or on importations by retailers or consumers the tax payable shall be two per cent, that the purchaser shall be furnished with a written invoice of any sale, which invoice shall state separately the amount of such tax to at least the extent of one per cent; that such tax must not be included in the manufacturer's or wholesaler's costs on which profit is calculated; and the tax shall be paid by the purchaser to the wholesaler or manufacturer at the time of such sale, and by the wholesaler or manufacturer to His Majesty in accordance with such regulations as may be prescribed, and such wholesaler or manufacter shall be liable to a penalty not exceeding $500, if such payments are not made, and in addition shall be liable to a penalty equal to double the amount of the excise duties unpaid.


Francis Ramsey Lalor: Do I understand that in addition to the sales tax, or the tax upon imports, imposed upon the manufacturers there is to be a tax on raw materials as *well?


Henry Lumley Drayton: No, it does not affect the matter of raw materials at all. It applies to the case where the manufacturer sells direct to the consumer instead of to an intermediary, or where the retailer imports direct.


William Daum Euler: It seems to me that in the past there has been a good deal of fault found, and a great deal of criticism passed, because too many middlemen are taking profits. If you place a tax of 2 per cent where the manufacturer or importer sells direct to the consumer, you are directly encouraging the business of the middleman. I have not very carefully read the report of the Board of Commerce, but I think they refer to the fact that the middleman does increase the cost to the consumer. It seems to me that this particular clause is designed to intensify that condition of affairs.


Francis Ramsey Lalor: This is a serious tax on the firm that sells direct to the retail trade, and I happen to be connected with such a firm. We have to charge our customers in the retail trade 2 per cent on all the goods we sell them. It strikes me that great confusion will be caused, because the wholesaler charges only 1 per cent on his sales. Now, notwithstanding the fact that the wholesaler pays 1 per cent on what the manufacturer sells to him and then charges the retailer 1 per cent, I can see that he is placed in the same position indirectly as the manufacturer who sells direct to the retail trade. But what about the customer who gets an invoice from my concern, for instance, and finds that he is charged 2 per cent, while from the wholesale merchant he gets an invoice charging him only 1 per cent, and the price probably is the same? I fear it is going to create a great deal of dissatisfaction in the retail trade. This is a pretty heavy tax. I can easily understand that the Minister of Finance is after money, and we should all realize that we must pay. But this tax is going to raise a lot of money. The concern I am connected with does a business of $3,000,000 with the retail trade; a 2 per cent tax on that turnover is $60,000 a year; and besides that we are paying a tax of 1 per cent upon all the raw materials we buy, which taxes must be absorbed in the cost of the goods. As I said before, the Minister of Finance is 229i
after money, and I think he will get it, but I am afraid there is going to be a conflict between the *wholesaler and the manufacturer selling to the retail trade.


Andrew Ross McMaster: I want to point out to the minister just how harshly this tax will bear upon some of the poorest of our population. Woodworking mills in various parts of the country have been accustomed to sell their mill refuse-their slabs, shavings and sawdust, foT firewood-


Henry Lumley Drayton: All fuel is exempt. Those are all looked after, I think.


Michael Steele: In order to get this clearly before the committee, am I right in understanding that the intention of the Minister of Finance is to strike out paragraph (a) of resolution 7 and substitute therefor what he has just read to the committee?


Henry Lumley Drayton: Yes, Mr. Chairman.


Andrew Ross McMaster: The minister interrupted me to say that fuel was exempt. It is not exempt in the resolution which is now before us. He may perhaps intend to move an amendment, and if he does, of course, my remarks are covered.


Henry Lumley Drayton: Yes.


William Foster Cockshutt: In the classification under the heading of "merchants and wholesalers," is a manufacturer's agent included? I have had strong representations made to me on behalf of manufacturers' agents. There are a large number of them in Montreal and Toronto whose business it is to bring the wholesale handler in Canada into touch with the British manufacturer, and in some oases with the American manufacturer. Those men never handle the goods, they act purely as agents, and their commission is never more than 1 per cent, and it is often less on large transactions. For instance, a thousand tons of pig iron might be ordered, and he is the intermediary and knows exactly where to fill that order. These manufacturer's agents represent large numbers of foreign firms, and perhaps Canadian firms. I have representations from a Montreal firm particularly on this point, and I think the change the minister is making covers it, but it is rather difficult in listening to the reading of an amendment to appreciate its exact purport. But I understand that the manufacturer's agent hereafter will do what he as been doing

since these resolutions became effective,- charge 1 per cent on the invoice direct to hie customer, and when the goods are delivered from the manufacturer another 1 per cent will be collected from the latter, making 2 per cent, and equalling what the member for Haldimand (Mr. Lalor) has just spoken about. It is really two different parts of the one transaction. I would like to know if that is the force of the amendment now introduced.	[DOT]


Henry Lumley Drayton: We aTe dealing only with the concrete case of sales by manufacturers, wholesalers and jobbers, and importations. Whether a man is selling or not depends upon the question of fact, not upon the question of his description. If the manufacturers' agents are selling on a salary undoubtedly the sale is the manufacturer's. If they are agents selling on commission undoubtedly the 6ale again is the manufacturer's. Selling on commission the property never is the agent's, the risk is never his. He may look after the invoicing of goods, and very often does, but as a matter fact he is merely the means through which the manufacturer is selling. If we look at it in any other way we will be regarding i't as a double tax on the manufacturer and fixing another point at which the tax would be levied. We are not doing that. There are merely the two taxes. The position therefore is that if the Canadian manufacturer is working through an agent he pays, of course, his 1 per cent; if, on the other hand, the agent is working for an English manufacturer, that agent is in fact acting as importer either in his own capacity or on behalf of the manufacturer, and in that case he would pay 1 per cent. And, again, it would depend entirely upon the sale, because the tax is 1 per cent, but if he made it directly to the retailer or for consumption directly it would become 2 per cent whether imported or whether of local manufacture.


William Stevens Fielding: Will the minister explain the case of the 2 per cent?


Henry Lumley Drayton: That will be exactly the same as the other case. If he were to sell direct to a retailer, leaving out the usual channels of business, he would then pay the 2 per cent. In other words, we get two turn-overs on the business.


Francis Ramsey Lalor: The minister will understand the difficulty of the manufacturer who sells to the retail trade when he charges his customer two per cent. The wholesaler pays the manufacturer one per cent and he [Mr. Cocksh.utt.3
is permitted to absorb that one per cent in his cost,-to get it back from his customer in an indirect way to that the customer does not know he is paying it. A great many manufacturers to-day are selling to the retail trade, and if this provision is adopted in its present form they will indeed be placed in a very awkward position.


John Harold: In that case the retail
trade might also pass on the two per cent. A great many of them handle their goods at a very small margin and are finding considerable difficulty in absorbing that one per cent, whereas if they could hand down the two per cent the difficulty would be solved. But ll rose particularly to bring to the atten-tiofn of the minister an industry which should be specially dealt with in these resolutions,-the binder twine industry. Binder twine and the raw materials entering into its manufacture are on the free list. Under the present resolutions the binder twine industry will be discriminated against to the extent of nearly one per cent, and as one large institution that I know of has never paid a dividend equal to one per cent, it practically -means putting them out of business. If this two per cent clause is passed the American manufacturer will have to pay two per cent. If he sells through a jobber in Canada the jobber will pay one per cent and the American manufacturer will pay one per cent. If he sells direct to the retailer, two per cent will have to be charged at the time of importation. The Canadian manufacturer is in the same position in that respect,-he also will have to pay the two per cent tax, or it will be divided between himself and the jobber. But the Canadian manufacturer has to pay tax on his raw materials, which represent five-sixths of his cost. I suggest that all materials and supplies used in the manufacture of binder twine be exempted from the one per cent import tax or the one percent turnover tax if produced in Canada.


William Stewart Loggie: It seems to me that some provision should be made to meet the case of a firm engaged in both the wholesale and the retail business, which imports goods, some of them for their wholesale branch and some for their retail branch. Would it be provided that the wholesale department might charge the one per cent to the retail department and pay into the treasury on receipt of the goods only one per cent? How could that condition be met?


Henry Lumley Drayton: The tax on
import is one per cent unless the goods are to be sold direct.


William Stewart Loggie: But suppose a portion of the goods are invoiced to the retail department and the balance to the wholesale department?


Henry Lumley Drayton: The question is not so much where the goods were invoiced to as what was actually done. This firm get a large amount of goods; part of it goes into the retail establishment and part into the wholesale establishment. That which went into the wholesale establishment would be liable to the two per cent when it was sold to the public. There is no transfer to themselves as wholesalers; they are importing for sale direct, and they would not have to pay that tax until they sold direct.


John Alexander Stewart: The trend of modern business provides for a policy by which the manufacturer markets his goods, and everything that has occurred during the past ten years in the way of increasing economy in the management of business has taught both manufacturer and retailer that as many middlemen as possible should be eliminated. I appreciate the fact that in some instances the jobber or the wholesaler may be disriminated against where he has to pay on the invoice from the manufacturer a sales tax of one per cent and then pass on another one per cent to the retailer. But as the amendment now stands, I submit, the manufacturer is discriminated against. The manufacturer doing business to-day will sell to a jobber upon a basis that will enable the jobber to sell goods at the same price that the manufacturer does, provided the manufacturer also goes out and markets his goods direct. It is good business to do that; in fact, any other policy is practically impossible. If the manufacturer follows the policy of both marketing direct to the retailer and selling to the jobber he can afford to sell to the jobber cheaper than he can sell to the retailer because in connection with that branch of his business he is not obliged to keep a selling force. As a rule the jobber goes to the manufacturer's establishment and buys what he wants and his salesmen sell the goods to the retailer. In the large majority of cases the manufacturer keeps his own selling force so that his goods are sold at the same price by his travellers as they are sold at by the representatives of the wholesaler or the jobber. Now, what occurs? A retailer buys a line of goods from the salesman or from the sales force of the manufacturer, and at the same time he buys, or can buy, the same goods from the sales force of the jobber. He gets the invoices, and upon the invoice from the manufacturer he is charged a
sales tax of 2 per cent and upon the invoice from the jobber he is charged a sales tax of 1 per cent. That discriminates at once against the manufacturer and tends to create a condition where the manufacturer would reap an indirect advantage by marketing his goods indirectly through a jobber. There is this additional view, that after all the matter of values in buying is largely a matter of judgment, a mental condition on the part of the buyer. In the purchase of a very large range of commodities it is absolutely impossible for the buyer to form any absolute judgment, because the value depends so often upon things which are concealed and which it is impossible for him to determine, so that the matter is largely a mental condition. Suppose, acting on his judgment, he buys from a jobber a line of goods to sell at a certain price, and then he goes direct to the manufacturer and, again acting on his judgment, buys a competitive line of goods to sell at the same price. On the goods he buys from the manufacturer he has to pay 2 per cent of a sales tax as against 1 per cent of a sales tax he has to' pay on the goods he buys from the jobber. That is a condition that operates directly against a manufacturer who markets his goods directly.


Mr. ALLAN:: It operates against the public also.


John Alexander Stewart: Where a
jobber buys from a manufacturer, the manufacturer, under the provisions of the resolution, is bound to put upon the invoice as a separate entry a sales tax of 1 per cent. He pays that 1 per cent and he is permitted to absorb that 1 per cent into his cost. Upon that 1 per cent he is permitted to take a profit. But the 2 per cent, which the manufacturer is obliged to levy upon his direct sales from his factory to the retailer, he is not permitted to absorb at all, nor is he permitted to take any part of it into his cost. What I submit is this, that the average manufacturer would infinitely prefer to pay 1 per cent and absorb it himself rather than show upon his invoice double the amount that would be shown upon the invoice of the jobber or wholesaler. There may be certain lines where it might be found that 1 per cent was too large. There are a large number of lines in which jobbers do not intervene at all to-day and there are a large number of other lines where jobbers intervene to a very limited extent; but in my opinion, in every case where a line is marketed by the manufacturer him-

self directly and also marketed through a jobber, the manufacturer would infinitely prefer to pay and absorb one pet cent to being placed at the disadvantage at which he will be placed if he is obliged to put 2 per cent on his invoice when he sells directly to the retailer.


Isaac Ellis Pedlow: In my judgment, the position taken :by the minister as regards this phase of the situation is absolutely correct. It is only reasonable to expect that the manufacturer and the wholesaler should be placed on absolutely the same level. We know 'from the wording of this resolution that the manufacturer will charge the wholesaler 1 per cent on his sales to the wholesaler, and consequently the wholesaler will add that to the cost of his merchandise and charge 1 per cent to the retailer, and these together, or 2 per cent, will be passed on to the Government. Why, then, should the manufacturer escape the 2 per cent that is paid in that transaction through the other avenue? It is absolutely fair, it is only simple justice, that that condition should operate and that the minister should pursue that' course. It obviates another difficulty. We know that many manufacturers sell direct to large retail stores and do not sell to small retailers at all. If the idea advocated by the 'hon. member for Haldimand (Mr. Lalor) and the hon. member for Lanark (Mr. Stewart) were listened to, these large departmental stores would be favoured to the extent of 1 per cent as against the small retailers. That would be absolutely unfair. I trust the minister will not consider that argument at all.
There is another feature in connection with the matter of the retailer buying directly from the manufacturer. On the admissions of the hon. member for Haldimand and the hon. member for Lanark the retailer gets no advantage in buying direct from the manufacturer, because the manufacturer will sell to the wholesaler at a lower price than he will sell to the retailer. Consequently, there is no advantage on the score of buying direct from the manufacturer excepting as regards the matter of delivery, and that is the point that influences the retailer in every instance in buying direct from the manufacturer. Therefore, in my judgment, it is an open question whether it is "more (economical for a retailer, small or large, to buy directly from a manufacturer or through the wholesale trade. As a matter of fact, from the admission made by my two hon. friends, who know ,what they are talking about, there is, from an economical point
IMr. J. A. Stewart.]
of view, no advantage to the retailer in
(buying direct from the manufacturer at the present time, because he knows that the manufacturer will not sell to the retailer as low as he will sell to the wholesaler; he will sell to the wholesaler at such a price that the wholesaler can, in turn, sell to the retailer at the same price as the manufacturer sells at direct to the retailer.
There is something in the argument put forward by the hon. member for Brant (Mr. Harold) as regards binder twine. That is a feature which, I am sure, will appeal to the minister, namely, that in the matter of raw material there is a discrimination against the home manufacturer, and consequently there would be a discrimination against the farming industry of this country. I am sure it is not the intention nor desire of this committee to penalize the farming industry of this country to any extent. We want to encourage farming in this country as much as we can. As regards the margin of taxation being absorbed in the cost of the manufactured goods, that is only a trifling amount, and the manufacturer passes it on in any event to the wholesaler or retailer so that there is no room for grumbling.
Another element to be considered is that of the agent, or salesman, or traveller- these three elements in distribution are one and the same thing. An agent may represent a European concern; but if he sells to the trade in this country, the importations come direct to the importer and not as a rule to the agent. When a salesman goes out direct to represent a manufacturer in this country selling domestic goods, he is on the same level exactly as a traveller representing a wholesale concern.
The hon. member for Brome (Mr. Mc-Master) and the hon. member for Shelburne and Queen's (Mr. Fielding) said that there was a good deal of kicking about some of the features that are embodied in this particular section. If the hon. member for Cape Breton North and Victoria (Mr. McKenzie) will permit me, I will quote Scripture, and I am sure he will corroborate me in that quotation. We find in the Scriptures the saying "How hard it is to kick against the pricks." These are the little pinpricks that annoy us, but we have to put up with them. There are some features to which I would direct the attention of the Minister of Finance and ask for a ruling at the present time. Will merchandise sold prior to May 19, and paid

for but not delivered, be subject to this tax? I understand that the Commissioner of Taxation has ruled that delivery is completion of contract. That ruling was given since this resolution was brought down on May 19. If delivery is completion of contract, then merchandise that has been sold prior to May 19, and paid for but not delivered, would be subject to taxation. I have in mind large timber deals. There are some members of the committee who will understand the working out of that kind of transaction. I understand that it is the custom of lumber dealers to sell their entire cut and get paid for it long before delivery. It is sold very often in the shape of logs in the winter to be manufactured into lumber, and delivered as called for during the ensuing year. Will lumber sold under those conditions be subject to the tax? I have in mind another instance where a manufacturer of grain bags sold for delivery during the months of August, September and October $500,000 worth of grain bags. The orders were put through in the months of January and February, the bags to be delivered at contract price in the months of August, September and October of the same year. Will the manufacturer be obliged to charge his customer the 1 per cent tax on that transaction? If so, I fear there will be a great deal of trouble in 'connection with transactions of this kind.


Henry Lumley Drayton: I cannot say that the point raised by the hon. member (Mr. Pedlow) has been drawn to my attention before. I would think that the turnover tax is a tax that applies to turnover, and that it would be collected whenever that turn-over takes place. If you have not delivered your goods before the resolutions were brought down, the turn-over tax should be payable. Certainly that is the method by which the converse case would have to be approached. So far as importations are concerned, it does not matter when the goods are sold. It is when they are imported that counts. It seems to me it is the importation on one side and the turnover on the other side which is the thing that counts. As to the point raised as to the manufacturer on the one side and the wholesaler on the other, I confess that our only idea is to try and do the fair thing and not disturb business as it is now being carried on. We are leaving the wholesaler and the manufacturer where they were. It all comes down to this one point. Hon. gentlemen have pointed out that so far as Mie manufacturer is concerned he has to charge 2 per cent, and show it. He must
not include it in his costs, but send it on. So far as the wholesaler is concerned, he has a right to absorb the first one per cent in his costs and charge a profit on it. That statement was made by one hon. gentleman who is objecting from the manufacturer's standpoint. Now it is perfectly obvious that if the wholesaler absorbs that first one per cent in his costs and charges a profit on it, as he can do, his price certainly must be greater than the manufacturer's price, and the manufacturer certainly cannot complain if after he has sold his goods and got the profit he desires to make, the wholesaler absorbs the tax which he has paid to the manufacturer and then puts a profit on top of that again. The manufacturer cannot complain of that kind of competition from the wholesaler.
I do not know that there is anything of real moment in what we are discussing, because after all the whole of this objection is simply this: The manufacturer who is selling direct says: " You make it a little more difficult for me to do business than before, because I have to show a 2 per cent tax, while the wholesaler has only to show a one per cent tax." Now the matter of moment here is that the country gets the benefit of these two turnovers, and the matter of moment further is that there should be some record kept of these taxes; they should be passed along and there should not be too much profit on them. The manufacturer gets none, while the wholesaler can absorb one per cent. It seems to me the fair thing to do would be to treat the manufacturer exactly the same as the wholesaler, and say that in cases where the manufacturer sells direct to the retailer he may absorb one per cent of the 2 per cent, and only show a separate tax of one per cent.


Francis Ramsey Lalor: I should just like to suggest to the minister that if in addition to the proposition he has just made, which I think is quite fair, he would give the wholesaler permission, instead of absorbing one per cent, to charge 2 per cent, he would be placing them both on the same footing, and the wholesaler would not be charging a profit on the one per cent. I do not wish to enter into a controversy with my hon. friend (Mr. Pedlow) as to the advantage of buying from the manufacturer or wholesaler. That is a matter for himself, as a retailer, to consider, as I have no doubt he has been doing for a good many years. I think that if the manufacturer was permitted to absorb one per cent when selling

to the retailer direct, it would overcome a good deal of the difficulty.


William Foster Cockshutt: I want to say a word nr two in connection with the point raised by the hon. member for South Renfrew (Mr. Pedlow) and the hon. member for Haldimand (Mr. Lalor). I think this tax is going to work a rather serious injustice on those who have contracted ahead for very large deliveries at a time when this tax could not have been anticipated, because nothing like it has been seen in Canada before. The minister says that this tax is on all-fours with a change in customs duties, but I do not understand that it is. A manufacturer or wholesaler who is selling goods, and who expects the customs duties to be changed, protects himself by saying that should the duty be increased or diminished before the goods are delivered that will be taken into account and the charge will be made accordingly. That is ia common thing in business. It is not a common thing, however, to have an internal tax imposed, and the manufacturers and wholesalers could have no idea that it was coming. Therefore, they are unprotected on their vast commitments for delivery in the autumn of this year. My hon. friend (Mr. Pedlow) has given one example, and hundreds of others could be given. I know several firms that have contracted for delivery of 50 or 100 carloads of goods at a certain price without taking this tax into account. That being the case, the whole tax is going to fall on the man who made the contract. And he is going to be compelled to pay not a few dollars but amounts running into thousands of dollars of taxes that he could not foresee, because there has never been anything of this kind before. Therefore it does not stand on all-fours with the customs tax. With regard to binder twine, there is in my riding the largest and only independent binder twine concern in Canada that has survived the benefits of free trade to the binder twine industry. There used to be sixteen or twenty binder twine concerns in Canada before this article was put on the free list, and the number is reduced to one; and as the hon. member for Brant has pointed out, while this institution has to pay a duty of one per cent on about 80 per cent of its raw material-


John Harold: On the total cost.


William Foster Cockshutt: Yes, on the total cost -he is not allowed to make that up as compared with the American, who is exporting this article into Canada entirely free of duty. So that in addition to this product 
being on the free list, the Canadian manufacturer of binder twine will be disadvantaged to a considerable extent on his raw material and all the things that go into the manufacture of binder twine. I do not think the minister wishes to do an injustice of this kind, even if there are only one or two industries of this sort left in Canada. This manufacture of which I speak is a very large institution and is well managed. It has survived the fierce storms of free trade for the last five or ten years, and I trust that the minister will not wipe it out now by exacting a tax on raw materials and subjecting the Canadian manufacturer of this commodity to an impediment which the American manufacturer who ships his goods into Canada will not have to meet. I want to back up my hon. friend (Mr. Harold) in regard to this point because it is a strong one. With regard to the point raised by my hon. friend from Lanark in in connection with the conflict that might arise between the manufacturer and the wholesaler, this is a delicate question and I have been interested in both kinds of business as my hon. friend who is sitting beside me knows. But I want to point out that while it may be good political economy, as the hon. member says, for the manufacturer to go direct to the retailer, that is not always nor nearly always the case. There are certain lines of goods that are in consumption in Canada in every small city, town and village, but it would not pay to send a traveller to any particular section to sell only one line of some goods that might not justify the traveller's expenses. Take scrub brushes for instance, which are handled by every grocer. Now, the brush trade is a big business in itself, but if a manufacturer of brushes were to send a traveller to these outlying districts to take orders which would run from $25 to $50 at the most, the traveller's expenses, salary, etc., would cost the consumers in those little towns and villages more than if the goods were sold to the jobber, who is the wholesaler in this case and who goes all over the country offering one hundred or five hundred lines to one customer. If you split it up to much it becomes not economy but extravagance, and there is no doubt that there are scores of lines, such as brooms, etc., that make up quite a large manufacture in themselves but no one of which is sufficient in volume to pay a traveller to go to distant points. I think therefore that the minister has arrived at a good solution. His proposal is fair and and sound as to the division of the tax, and I trust that the committee will adopt it, be-

cause it is a great advance over what he had in the original resolution.


Henry Lumley Drayton: Apparently the proper thing to do is to add after the word "tax" in the ninth line, the words "to at least the extent of one per cent."


Isaac Ellis Pedlow: Notwithstanding that
proviso will the manufacturer still have to pay the percentage prescribed?


Henry Lumley Drayton: Yes.


John Harold: Will the importer have
to pay 2 per cent when he ships direct to the retailer?


Henry Lumley Drayton: Yes.


Andrew Ross McMaster: As I recollect the resolution which was read, this 2 per cent or 1 per cent as the case may be, has to be calculated on the value for duty purposes. Now, in regard to goods coming from the continent of Europe, from France, Italy, Austria or Germany, we find that their currencies are so depreciated in comparison with our own that when the Government takes, as it does, the pre-war rate of exchange .as a basis for changing the currencies, when it takes the pre-war rate of exchange for the purpose of changing these invoices into dollars and cents, they raise the value of the goods four and five times; and if the minister takes the value for duty purposes arrived at in this way to fix his tax of two per cent or one per cent, as the case may be, he will be taxing four or five or eight times the amount which under a proper adjustment of the currencies he should tax. I would bring this matter home to the minister because I think that the Customs are making a great mistake in taking a purely arbitrary rate of exchange when they come to levy their duties, a rate which raises the duties to almost a prohibitive extent on things that pay tremendously high duties when they do come in. And then the minister proposes by his amendment to charge the one or two per cent on these inflated and swollen values for duty purposes.


Arthur Bliss Copp: I would ask the minister where the distinction lies between wholesaler and retailer. How is any one to know? I was talking to a large lumber manufacturer in my province no later than yesterday and he was asking me this very question. I could not tell him. I do not suppose that the minister can fully answer every question at a moment's notice, but
the people are deeply interested in these matters and would like to get all the information possible in regard to them. The man to whom I refer put this case to me: A man is the owner of certain timber limits in different sections possibly fifty miles from the owners of the mill who buy the logs. The logs are rolled into the stream fifty miles in the bush, and the mills have their surveyor there to look them over and take control of the logs. The man who owns the timber limits may sell a million feet of lumber to Mr. A, let us say. Is that a wholesale transaction? Mr. A takes them to the stream into the booms and sells them to Mr. B, who in turn sells them and they are manufactured into lumber. There are at least three wholesale transactions in regard to that lumber, and this man to whom I was speaking was anxious to know how those transactions would be regarded.


Henry Lumley Drayton: They would be all wholesale transactions. Transactions of that kind will be defined in the Bill.


William Stevens Fielding: Has the minister's attention been directed to the question of the cost of containers? I am informed that gasoline is handled in steel barrels which are of very substantial value, and a case has been brought to my notice where the purchaser of gasoline had to pay a tax not only on the value Of the gasoline but on the steel barrels worth $15 each. These things are ultimately returned they are not part of the real value. Has the attention of the minister been directed to the question of containers?


Henry Lumley Drayton: I think there should be no duty on the containers in connection with the turn-over tax. I think in the customs the practice is always to make a refund. There should be no difficulty about a refund here because we ought to know about what the value of the gasolene is. There should be no charge whatever on containers.


William Stevens Fielding: And if such a tax has been imposed, you think it would be a matter for refund?


Henry Lumley Drayton: I should think so. I should think it would be improper to put a tax on these containers. However, the matter can be adjusted as soon as the returns come .in.


Georges Henri Boivin: Shall the amendment carry?


Jacques Bureau: This i3 a very important clause. When the minister was making his Budget Speech he said:
The tax will not Include retailers as sucL buit will include the goods manufactured or imported by any retailer although manufactured or imported by such retailer for retail sale by himself.
Now we want a clear definition of the word "manufacturer," and if any doubt airises as to the interpretation what authority is to prevail? Let me give the minister an illustration. A man has a lumber yard and a planing mill. When he puts his lumber through the planer, does it become a manufactured article? Is the operator of a sawmill a manufacturer?


Henry Lumley Drayton: The definitin of all these different terms must be clearly and properly made, and the Bill that is brought down will cover these technical questions at greater length than is done in the resolutions.
Resolution as amended agreed to.
That the minister may require every manufacturer and wholesaler to take out an annual license for the purposes aforesaid, and may prescribe a fee therefor, not exceeding $5.


William Foster Cockshutt: When ie it required to take out this license? At any time in the year? Or will it be set out in the Bill? It is necessary to have the date defined.


Henry Lumley Drayton: That will be covered in the Bill.


[Stage Direction]
Paragraph agreed to.
(c)	That any such tax, costs or penalties may, at the option of the minister, be recovered and imposed in the Exchequer Court of Canada or in any other court of competent jurisdiction in the name of His Majesty.
Jacques Bureau: Why the Exchequer
Court?


Henry Lumley Drayton: The Exchequer Court is the proper court for suing, but we wish to have the right of action in any other court of competent jurisdiction so that we will not be bringing people here when they ought not to be brought.
(d)	That this tax on sales shall not apply to sales or importations of meats, fresh, salted or pickled; butter; cheese ; oleomargarine, margarine, butterine or any other substitute for butter; lard ; eggs ; vegetables; fruits ; grains and seeds in their natural state; buckwheat meal or flour; pot, pearl, rolled, roasted or ground barley; corn meal; oatmeal or rolled oats; rye flour; wheat flour; coffee, green, roasted or ground ; tea; salt; cattle foods : hay and straw; nursery stock; fish, fresh, pickled, salted, smoked, dried or boneless ; sugar syrups and molasses; anthracite or bituminous coal; artificial limbs and parts thereof or to goods exported.
[The Chairman.]
There are some additions to make to that. The list is not sufficiently broad in so far as food and fuels are concerned. Briefly the whole idea is to exempt those things altogether, and the wording we will now have will be as follows:
That this tax on sales shalle not apply to sales or importations of,-
Animals living; poultry; fresh, salted, pickled, smoked or canned meats ; canned poultry; soups of all kinds; milk, cream butter, cheese, buttermilk, condensed milk, condensed coffee with milk, milk foods, milk powder and similar products of milk; oleomargarine, margarine, butterine or any other substitutes for butter; lard, lard compound and similar substances; cottelene ; eggs ; chicory, raw or green, kiln dried, roasted or ground; coffee, green, roasted or ground ; tea ; hops ; rice ; cleaned or uncleaned ; rice flour; sago flour; tapioca flour; rice meal; corn starch ; potato starch ; potato flour ; vegetables, fruits, grains and seeds in their natural state; buckwheat, meal or flour; pot, pearl,' rolled, roasted or ground barley; corn meal; corn flour; oatmeal or rolled oats; rye flour; wheat flour; sago and tapioca; macaroni and vermicelli ; cattle foods; hay and straw; nursery stock; vegetables, canned, dried or desiccated; fruits, oanned, dried, desiccated or evaporated; honey; fish and products thereof; sugar, molasses ; maple, corn and sugar cane syrups and all imitations thereof;
I think that is a pretty full expansion of the food list.


Andrew Ross McMaster: You have forgotten
pease meal that we make brose out of.


Henry Lumley Drayton: I should not leave out pease meal if it is not there. Now to continue with the enumeration:
-ice; newspapers and quarterly, monthly and semi-monthly magazines and weekly literary papers unbound; gold and silver in ingots, blocks, bars, drops, sheets or plates unmanufactured ; gold and silver sweepings; British and Canadian coin and foreign gold coin; materials for use only in the construction of ships; anthracite and bituminous coal and coal dust, lignite, briquettes made from anthracite or bituminous coal or lignite, coke, charcoal, peat, wood for fuel purposes; electricity; calcium carbide; gas manufactured from coal, calcium carbide or oil for illuminating or heating purposes ; ships licensed to engage in the Canadian coasting trade; artificial limbs and parts thereof ; donations of clothing and books for charitable purposes ; settlers' effects; articles enumerated in schedule c of The West India Agreement or to articles purchased for use of the Dominion Government or any of the departments thereof or by or for the Senate or House of Commons.
A drawback may be granted of the tax paid on goods exported or on materials used, wrought into or attached to articles exported.


Jacques Bureau: Do I understand that smoked meats are included in the list which has just been read by the minister?


Henry Lumley Drayton: Yes.


William Foster Cockshutt: There are quite a number of items coming under the head of "food products" that are still omitted. For example, macaroni and vermicelli.


Henry Lumley Drayton: Those articles are included.


William Foster Cockshutt: Also wheatina?


Henry Lumley Drayton: Not wheatina.


William Foster Cockshutt: Wheat meal?


Henry Lumley Drayton: Wheat flour is covered.


William Foster Cockshutt: It is not flour. It is wheat meal that appears on the breakfast table every day and, in this hot weather, is one of the best breakfast foods we have. The minister ought to look very carefully into this matter because there are a number of food products that are still not on the list.	i	.


William Stevens Fielding: I do not suppose the
minister expects to report his resolution tonight. Might I suggest therefore that this is perhaps a good moment to stop in order that the long list he has given may be examined to-morrow? I think the minister is to be congratulated upon the degree of progress he has made to-day.


Francis Ramsey Lalor: Might I ask the minister a question before he replies to my hon. friend? What is the position of the large departmental stores that manufacture nearly all the lines of goods they themselves sell? Will they be subject to the 2 per cent tax?


Henry Lumley Drayton: On anything that they manufacture themselves and on anything that they import themselves they will pay the 2 per cent tax.


Jacques Bureau: We need a definition of the word " manufacturer."


Henry Lumley Drayton: I have much
pleasure in acceding to the suggestion made by the hon. member for Shelburne and Queen's (Mr. Fielding), and I thank him and other hon. members for the progress that we have made to-day. I therefore move that the committee rise and report progress and ask leave to sit again.


John Harold: Before that motion is
. put


Georges Henri Boivin: Unless the hon. minister withdraws his motion the hon. member cannot proceed, the motion not being debatable.


John Harold: The hon. minister permits me to make this statement-


Georges Henri Boivin: It is not with the permission of the hon. minister. If he wishes to withdraw his motion, well and good; otherwise the hon. member is out of order. Do I understand the hon. minister to withdraw his motion?


William Stevens Fielding: There will be lots of
time to-morrow for the hon. member for Brant (Mr. Harold) to proceed.


Henry Lumley Drayton: I withdraw my motion.


John Harold: It is just in order to comply with the minister's own suggestion, that when he brought up this list I would make reference again to the question I raised about materials and supplies of binder twine being excepted along with the other things on the free list.


Henry Lumley Drayton: Then I renew my motion, Mr. Chairman.
Motion agreed to and progress reported.
On motion of Right Hon. C. J. Doherty the House adjourned at 12.35 a.m. (Wednesday).
Wednesday, June 16, 1920.